Pepsi Corporation's current ratio is currently1.0,whereas Coke's current ratio is1.5.Both companies want to fix these ratios. In
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Question:
Pepsi Corporation's current ratio is currently 1.0, whereas Coke's current ratio is 1.5. Both companies want to "fix" these ratios. In order to do that, they both double their short-term debts and deposit the funds they get into a bank account. Which of the following statements best describes this year?
Group of answer choices
These measures have no effect on the working capital ratios of the companies.
Only Coke's working capital ratio decreases.
None of these are correct
The current ratio of both companies is decreasing.
The current ratio of both companies is increasing.
Only Pepsi's working capital ratio increases.
Expert Answer:
The current ratio is calculated as textCurrent Ratio fracCurrent AssetsCurrent Liabilities If both P... View the full answer
Related Book For 
Intermediate Accounting
ISBN: 978-1260481952
10th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas
Posted Date:
