A firm has a current ratio of 1.2 and a quick ratio of 0.5. This indicates that:

a. The firm buys inventory on credit.

b. Inventory represents more than 50 percent of the firm’s current assets,

c. Cash is the largest component of current assets.

d. The firm has more current liabilities than it does current assets.

e. Current assets represent more than 50 percent of total assets.

Answer rating: 100% (QA)

B Inventory re... View the full answer