If a company has a current ratio of 1.2:1, what respective effects will the borrowing of cash by short-term debt and collection of accounts receivable have on the ratio? $$\begin{array} { l c }
~~~~~\text {Short-term Borrowing } & \text { Collection of Receivables } \
\text { a) increase } & \text { no effect } \
\text { b) decrease } & \text { increase } \
\text { c) decrease } & \text { no effect } \
\text { d) decrease } & \text { decrease }
\end{array}$$

Question

If a company has a current ratio of 1.2:1, what respective effects will the borrowing of cash by short-term debt and collection of accounts receivable have on the ratio? $$\begin{array} { l c } 
~~~~~\text {Short-term Borrowing } & \text { Collection of Receivables } \
\text { a) increase } & \text { no effect } \
\text { b) decrease } & \text { increase } \
\text { c) decrease } & \text { no effect } \
\text { d) decrease } & \text { decrease }
\end{array}$$

Quizplus · Accepted Answer

The Answer of If a company has a current ratio of 1.2:1, what respective effects will the borrowing of cash by short-term debt and collection of accounts receivable have on the ratio? $$\begin{array} { l c } 
~~~~~\text {Short-term Borrowing } & \text { Collection of Receivables } \
\text { a) increase } & \text { no effect } \
\text { b) decrease } & \text { increase } \
\text { c) decrease } & \text { no effect } \
\text { d) decrease } & \text { decrease }
\end{array}$$

If a Company Has a Current Ratio of 1