Problem

For the following questions, circle the best response.If the trend of the current ratio is...

For the following questions, circle the best response.

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

a. carrying excess inventories.

b. depleting its inventories.

c. having trouble collecting its receivables.

d. purchasing too much property, plant, and equipment.

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