Question: 18. Which of the following actions would decrease the current ratio (assuming an initial current ratio of 1.8, and current liabilities equal to $1,000,000)? Borrow

 18. Which of the following actions would decrease the current ratio

18. Which of the following actions would decrease the current ratio (assuming an initial current ratio of 1.8, and current liabilities equal to $1,000,000)? Borrow $100,000 in short term debt und deposit this money (i.c., $100,000) into the firm's cash account b. Borrow $200,000 in long-term debt to buy $200,000 worth of additional inventory c. Borrow $50,000 of short-term debt and use the proceeds to pay all operating expenses sooner, thus lowering accruals (ie, accrued expenses) by 550,000 & Sell $250,000 of fixed assets to pay off an equal amount of long-term debt, c. None of the above that is none of the actions listed about will decrease the current ratio

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!