25) If all else is held equal, an increase in the current ratio of a company is generally considered to be A) an indication that current assets have decreasedB) an indication that current liabilities have increasedC) an indication that the company will have increased difficulty meeting short-term obligationsD) an indication that the company will be better able to meet short-term debt obligations26) The rate of return on net sales is calculated as:A) gross margin / net salesB) net income / net salesC) operating income / net salesD) dividends paid during the year / net sales27) Trent Corporation has total current assets equal to $50,000 and working capital of $20,000. Fleming Company has the same amount of working capital, but it has total current assets of $300,000. The company with the better working capital position is:A) Fleming CompanyB) Trent CorporationC) They both have equally good working capital positions.D) indeterminable with the information given28) Which of the following ratios measures profitability?A) rate of return on total assetsB) times-interest-earned ratioC) inventory turnoverD) book value per share of common shares29) A very high accounts receivable turnover would most likely indicate that:A) net credit sales for the year have been understatedB) policies for extending credit to customers are too tightC) accounts receivable balances have been overstatedD) the company is unsuccessful in its efforts to collect cash from customers30) Which of the following statements about inventory turnover is most appropriate?A) Companies generally strive to have the highest possible inventory turnover ratio.B) A high ratio indicates the company is having trouble selling its inventory.C) The most profitable turnover ratio may not necessarily be the highest.D) A low ratio generally means the company is not keeping enough inventory on hand.