Firms A and B have the same current ratio, 0.75, the same amount of sales and cost of goods sold, and the same amount of current liabilities.However, Firm A has a higher inventory turnover ratio than B.Therefore, we can conclude that A's quick ratio must be smaller than B's.

Question

Quizplus · Accepted Answer

firm A has the higher inventory turnover, so given the same cost of goods, it must have less inventory.thus, since the two firms have the same CR, then A must have the higher QR, not the lower one.therefore, the statement is f.

Firms a and B Have the Same Current Ratio, 0