Question: Current Ratio is easy to manipulate due to increase and decrease in the current assets and current liabilities changing. In that sense many business will

Current Ratio is easy to manipulate due to increase and decrease in the current assets and current liabilities changing. In that sense many business will change their numbers to make it seem like they are doing good in order to get investors to do business with them. Accordingly, overdraft against inventory can cause the current ration to change which shows that the current ratio can easy be manipulated through many area within the business.

a. How can they change their numbers in a legal and ethical way?

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