Which of the following would likely be most detrimental to a firm's current ratio if that ratio is currently 2.0?
A) Buy raw materials on credit.
B) Sell marketable securities at cost.
C) Pay off accounts payable with cash.
D) Pay off a portion of long-term debt with cash.

Question

Quizplus · Accepted Answer

Paying off a portion of long-term debt with cash would reduce the current assets without affecting current liabilities, thereby decreasing the current ratio.

Which of the Following Would Likely Be Most Detrimental to a Firm's