What situations could cause a decrease in the current ratio, but an increase in the acid-test ratio? If this happens, is management to be commended or is a problem evident? Explain
The current ratio is comprised of current assets divided by current liabilities. Since the acid-test ratio does not contain inventory or prepaid items, it is always less than the current ratio. The current ratio will decrease when total current liabilities increase or when total current assets decrease. The increase in the acid-test ratio must be larger than a decline in the other current assets, to create this situation.
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A) large disposable income. B) increased competition. C) increased consumer awareness. D) intense economic activity.
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A) actual product B) augmented product C) core benefit D) product design E) utility product
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A. Lateral B. Intrinsic C. Extrinsic D. Vertical
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a. reducing a feeling of uncertainty among consumers. b. making impulse purchase decisions. c. recognizing one's feelings and formulating opinions. d. shaping human behavior as they are transmitted from one generation to the next.