What will happen to return on investment (ROI)if current assets decrease while everything else remains the same (assume the current assets decreased is part of operating current assets)?
A)ROI will decrease over time.
B)ROI will increase over time.
C)ROI will not be affected.
D)We cannot determine the direction of the effect from the information provided.

Question

Quizplus · Accepted Answer

When current assets decrease while everything else remains the same, it implies that the company is utilizing its assets more efficiently, assuming these assets are part of operating current assets. This increased efficiency can lead to higher profitability relative to the investment, thus potentially increasing the return on investment (ROI) over time.

What Will Happen to Return on Investment (ROI)if Current Assets