Accounting: What the Numbers Mean 9th Edition by Wayne W McManus, Daniel F Viele, David H Marshall

Exercise 23

For the following questions, circle the best response.

If the trend of the current ratio is increasing while the trend of the acid-test ratio is decreasing over a period of time, this could be a warning that the firm is

a. carrying excess inventories.

b. depleting its inventories.

c. having trouble collecting its receivables.

d. purchasing too much property, plant, and equipment.

Step 1 of 2

The correct option is.