Refer to the following information Smith Office Supply Industry Mean
Current ratio 2.3 1.8
Quick ratio .4 .8
Average inventory turnover 2.0 3.9
Net sales-to-working capital 4.0 7.8
Debt-to-net worth ratio 3.0 1.7
Net profit to equity ratio 40.1 percent 22.2 percent
Which of the following statements is most likely false?
A) Smith relies heavily on inventory to meet its debt obligations.
B) Smith is sufficiently capitalized.
C) Smith's sales are inadequate.
D) Smith's prices may be too high and/or the inventory too "stale."
Correct Answer:
Verified
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