Ferris Corp.wants to increase its current ratio from the present level of 1.5 when it closes the books next week.The action of __________ will have the desired effect.
A)payment of current payables from cash
B)sales of current marketable securities for cash
C)write-down of impaired assets
D)delay of next payroll
E)None of the options

Question

Quizplus · Accepted Answer

Example: CA = $150; CL = $100; current ratio = 1.5; Pay $50 of CL with cash; CA = $100; CL = $50; current ratio = 2.B has no effect on ratio (CA remain same); C does not affect current account; D would decrease ratio.