The current ratio is greater than 1:1. What would be the impact on the companys accounting ratios
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The current ratio is greater than 1:1. What would be the impact on the company’s accounting ratios while buying an extra 3 weeks of goods from suppliers on credit and immediately before the year end?
(a) Increase in current ratio: increase in acid test ratio: decrease in the inventory (stock) holding period
(b) Decrease in current ratio: decrease in acid test ratio: increase in the inventory (stock) holding period
(c) No change in current ratio: decrease in acid test ratio: decrease in the inventory (stock) holding period
(d) Decrease in current ratio: increase in acid test ratio: increase in the inventory (stock) holding period
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