Which of the following would indicate an improvement in a company's financial position, holding other things constant?

Question

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An increase in the current and quick ratios would indicate that the company has more assets relative to its liabilities and could meet its short-term obligations easily. This would improve the company's financial position. Option B is incorrect, since a decline in the inventory and total asset turnover ratios would indicate that the company is generating less revenue from its assets, which is not an improvement. Option C is incorrect, since an increase in the debt ratio would indicate that the company has taken on more debt and is more leveraged, which could put it at greater financial risk. Option D is incorrect, since a decline in the profit margin would indicate that the company is less profitable, which would not improve its financial position. Option E is incorrect, since a decline in the EBITDA coverage ratio would indicate that the company is generating less earnings before interest, taxes, depreciation, and amortization compared to its interest expense, which could indicate that it is more risky or may struggle to service its debts.

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