All else constant, cash flow from assets increases when: Net working capital decreases. B Operating costs increase. Earnings per share decreases. Taxes decrease. E Earnings before interest and taxes decreases. 7 Which of the following is correct? The acid test ratio focuses on inventory management. The gross profit margin is identical to the operating profit margin in firms with no debt. The quick ratio and current ratio are identical in firms with inventory. Short term financial ratios focus on the net worth of the firm. Liquidity ratios provide information about the short term assets and liabilities of a firm. Which of the following would result in a lower return on equity, all else the same? An increase in the interest expense. A decrease in the cost of goods sold. The firm uses cash to buy inventory. An increase in earnings before interest and taxes. A higher sales revenue