a. Why should managers be interested in reducing the average age of their inventories if possible?
b. Give an example of a company whose liquidity might be more appropriately measured by the quick ratio than the current ratio. Explain why.
c. Explain how a firm can improve its Return on Equity without improving its profit margin or asset turnover.
d. A higher debt-to-assets ratio often leads to a higher cost of borrowing (and hence a higher discount rate). Explain why.