Which of the following statements is true about the current asset ratio?
A) An increase in the accounts receivable turnover ratio will generally result in an increase in the current ratio.
B) The current asset ratio is calculated by deducting current liabilities from current assets.
C) When calculating the current asset ratio, inventory should be deducted from other current assets.
D) If calculated correctly, the current asset ratio will always be greater than one.
E) None of the above statements concerning the current asset ratio is true.
Correct Answer:
Verified
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