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

Question

Quizplus · Accepted Answer

An increase in both the current and quick ratios would indicate that the company has improved its liquidity position by increasing its ability to meet short-term obligations. This would be a positive improvement in the company's financial position. The other choices (A, B, C, and D) all indicate negative changes in the company's financial position.

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