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Considered alone, which of the following would increase a company's current ratio? a. An increase in...

Considered alone, which of the following would increase a company's current ratio?

a. An increase in accrued liabilities.
b. An increase in accounts receivable.
c. An increase in net fixed assets.
d. An increase in accounts payable.
e. An increase in notes payable.

Solutions

Expert Solution

The right answer choice "b. An increase in accounts receivable"
The current ratio is calculated by using the following formula
Current ratio = Total current assets / Total current liabilities  
Accounts receivables is a part of the Current assets  
Therefore, an increase in accounts receivables would increase the company's current ratio

jeff jeffy answered 3 years ago
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