If the trend of the current ratio is increasing, while the trend of the acid-test ratio is decreasing over a period of time, this could be a warning that the firm is:
When the trend of the current ratio (current assets divided by current liabilities) is increasing, it suggests that the firm's overall liquidity position is improving. On the other hand, when the trend of the acid-test ratio (quick assets divided by current liabilities) is decreasing, it indicates a decline in the firm's ability to meet its short-term obligations without relying on inventory. If the firm is depleting its inventories (option a), it would likely result in a decrease in both the current ratio and the acid-test ratio. Option b, having trouble collecting receivables, would mainly impact the accounts receivable turnover ratio but not necessarily the acid-test ratio. Option c, purchasing too much treasury stock, would not directly impact the liquidity ratios. Therefore, option d, carrying excess inventories, is the most appropriate warning indicated by the given trends. It suggests that the firm may have an inefficient inventory management system or that demand for its products has decreased.
Curcuma longa belongs to the family
When meteorological drought prolongs it results in to____
Headquarters of World Metrological Organization is located at :-
Match the following:
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Turmeric is generally propagated by
Which of the following instrument is used to measure the lowest temperature.
Application of foreign materials to clouds to induce precipitation is termed as
Lines of connecting points of equal amount of rainfall is termed as
All phenomenon of weather and climate takes place inÂ
The biting taste of black pepper is due to the presence of the alkaloid