Each of the following would generally be considered a

Reference no: EM13574177

Each of the following would generally be considered a favorable indicator of an enterprises financial condition. There are circumstances where even though on the surface the ratio looks good, it may actually represents an unfavorable development. For each case give an example of where the event may actually be unfavorable.

a. A current ratio is above 4.0 which is substantially higher than other firms in that same companies industry

b. The accounts receivable collection period is significantly lower than for several recent periods

c. A rapidly rising inventory turnover ratio

Reference no: EM13574177

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