Use cash to pay off current liabilities

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Reference no: EM13974498

a. Modern Medical Devices has a current ratio of 0.5. Which of the following actions would improve (i.e., increase) this ratio? Select one (A-E): A. Use cash to pay off current liabilities. B. Collect some of the current accounts receivable. C. Use cash to pay off some longer-term debt. D. Purchase additional inventory on credit (i.e., accounts payable). or E. Sell some of the existing inventory at cost.

b. Assume that the company has a current ratio of 1.2. Now which of the above actions would improve this ratio?

Reference no: EM13974498

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