Question: MANAGING and FINANCING CURRENT ASSETS 1. Why does an increase in ratio of current assets to total assets decrease both profits and risk as measured

MANAGING and FINANCING CURRENT ASSETS

1. Why does an increase in ratio of current assets to total assets decrease both profits and risk as measured by net working capital? How do changes in ratio of the current liabilities to total assets affect profitability and risk?

2. What are likely to be the viewpoints of each of the following managers about the levels of the various types of inventory: finance, marketing, manufacturing, and purchasing? Why is inventory an investment?

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