Current Ratio. What effect would the following actions have on a ﬁrm’s current ratio? Assume that...

Current Ratio. What effect would the following actions have on a ﬁrm’s current ratio? Assume that net working capital is positive.

Inventory is purchased.
A supplier is paid.
A short-term bank loan is repaid.
A long-term debt is paid off early.
A customer pays off a credit account.
Inventory is sold at cost.
Inventory is sold for a proﬁt.

Expert Solution

Feedback is welcomed.

jeff jeffy answered 2 years ago

What effect would the following actions have on a firm's current ratio? Assume that net working capital is positive.

What effect would the following actions have on a firm's current ratio? Assume that net working capital is positive.1) inventory is sold for a profita. not change b. decrease c. increase d. there is not enough information to answer this question

Given the current ratio (…%) is decreased by the APRA, what effect would this have on...

Given the current ratio (…%) is decreased by the APRA, what effect would this have on the profitability of the banks and credit rating of the Banks/Australia?

7. Which of the following company actions will have no effect on its Leverage Ratio? a)...

7. Which of the following company actions will have no effect on its Leverage Ratio? a) It issues (sells) new equity shares and uses the money to purchase equipment b) It issues (sells) new equity shares and uses the money to pay off exactly that amount in bank loans c) It issues (sells) a bond and uses the money to pay off exactly that amount in bank loans d) It issues (sells) a bond and uses the money to return...

(See the eText on p. 81). What effect would the following actions have on Philippe Corporation’s...

(See the eText on p. 81). What effect would the following actions have on Philippe Corporation’s current ratio? Provide your reasoning. Hand-write your responses (no copying, please). a. Starting 2015 Current Ratio = _________________ b. $100 Inventory is purchased with cash. c. A supplier is paid $100 with cash. d. A short-term bank loan of $100 is repaid with cash. e. Long-term debt of $100 is paid off early. f. A customer pays off a credit account of $100. g....

#6 Do the following events decrease, increase, or have no effect on a firm’s current ratio?...

#6 Do the following events decrease, increase, or have no effect on a firm’s current ratio? Inventory is purchased with cash on hand. Company XYZ takes out a 5-year loan, with the money being used to pay suppliers. A customer pays a past due bill (the bill was not written off yet). Company XYZ establishes a line of credit with Bank ABC, which will allow it to borrow money in the future. The company sells a 10-year old machine, receiving...

Effect of Transactions on Working Capital, Current Ratio, and Quick Ratio The following account balances are...

Effect of Transactions on Working Capital, Current Ratio, and Quick Ratio The following account balances are taken from the records of Liquiform Inc.: Cash $ 70,000 Short-term investments 60,000 Accounts receivable 80,000 Inventory 100,000 Prepaid insurance 10,000 Accounts payable 75,000 Taxes payable 25,000 Salaries and wages payable 40,000 Short-term loans payable 60,000 Required: 1. Use the information provided to compute the amount of working capital and Liquiform's current and quick ratios (round to two decimal points). Working capital $ Current...

state the effect of the following transaction on the current ratio. Use increase, decrease, or no...

state the effect of the following transaction on the current ratio. Use increase, decrease, or no effect. payment of an account payable collection of accounts receivable decleration of cash dividends payment o f cash dividends payment of share dividend additional shares are sold for cash short term investments are purchased for cash equipment is purchased for cash inventory purchases are made for cash office supplies purchased on account invested cash in long term bonds payment of employee salaries arrears sold...

what effect would each of the following have on the value of the firm? (a) A...

what effect would each of the following have on the value of the firm? (a) A new advertising campaign increases the sales of the firm substantially. (b) A new competitor enters the market. (c) The production department achieves a technological breakthrough that reduces production costs. (d) The firm is required to install pollution - control equipment. (e) The workforce votes to unionize. (f) The rate of interest rises. (g) The rate of inflation changes.

What is the current ratio

what effect would each of the following errors have on the determined concentration of the unknown...

what effect would each of the following errors have on the determined concentration of the unknown acid? (would the calculated value be too high, too low, or unchanged? a) the mass of oxalic acid was recorded too low. b) the unknown acid was added to a flask containing 10 mL of water. c) the initial volume in the standardization was recorded too high. d) the initial volume in the determination of the unknown was recorded too high.

Question