A firm's current ratio is above the industry average; however, the firm's quick ratio is below the industry average.These ratios suggest that the firm
A)has relatively more total current assets and even more inventory than other firms in the industry.
B)is very efficient at managing inventories.
C)has liquidity that is superior to the average firm in the industry.
D)is near technical insolvency.

Question

Quizplus · Accepted Answer

Total current assets are high, and inventory is a very large portion of total current assets, relative to other firms in the industry.

A Firm's Current Ratio Is Above the Industry Average; However