Which of the following would indicate an improvement in a company's financial position, holding other things constant?
A) the current and quick ratios both increase.
B) the inventory and total assets turnover ratios both decline.
C) the debt ratio increases.
D) the profit margin declines.
E) the ebitda coverage ratio declines.

Question

Quizplus · Accepted Answer

An increase in both the current and quick ratios indicates that the company has more liquidity and can meet its short-term obligations more easily. This is generally a positive sign for a company's financial position. The other choices would indicate a deterioration in financial position.

Which of the Following Would Indicate an Improvement in a Company's