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zubka84 [21]
2 years ago
15

Walter Industries’ current ratio is 0.5. Considered alone, which of the following actions would increase the company’s current r

atio?
a. Borrow using short-term notes payable and use the cash to increase inventories.

b. Use cash to reduce accruals.

c. Use cash to reduce accounts payable.

d. Use cash to reduce short-term notes payable.

e. Use cash to reduce long-term bonds outstanding.
Business
1 answer:
MissTica2 years ago
4 0

Answer:

a. Borrow using short-term notes payable and use the cash to increase inventories.

Explanation:

The formula to compute the current ratio is shown below:

Current ratio = Total Current assets ÷ total current liabilities  

where,

The current assets = Cash and cash equivalents + Short-term investments + Accounts and notes receivable + Inventories + Prepaid expenses and other current assets

And, current liabilities would be

= Short-term obligations + Accounts payable

If the current ratio is 0.5 which means that the current asset is 1 and the current liabilities are 2 so the most appropriate option is a.

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Answer:

lower range 33.822 years

upper range 38.178 years

Explanation:

step 1:

48 -1 = 47

step 2:

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step 3:

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step 4:

divide sample standard deviation by square root of sample size

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step 5:

multiply results from step 3 and 4

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step 6:

for the lower range, subtract step 5 from sample mean

36 - 2.178 = 33.822

step 7: for the upper range, add step 5 with sample mean

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