For several years,Bosco Corporation has had a current ratio that was consistent with other companies in its industry.For the most recent year,Bosco's current ratio was significantly higher than that for the industry.What is the best possible explanation for this situation?
A)The other companies in the industry were not as profitable.
B)Bosco's liquidity has improved or is not leveraging financial resources effectively.
C)Bosco has less property,plant,and equipment than other companies.
D)Bosco has too much debt.

Question

Quizplus · Accepted Answer

A significantly higher current ratio suggests that Bosco has improved its liquidity, meaning it has more current assets relative to current liabilities or is managing its resources more effectively. Option A, C, and D are not necessary explanations for this situation.

For Several Years,Bosco Corporation Has Had a Current Ratio That