Last year, a firm had a current ratio of 1.14. This year, the ratio is 0.98. Assuming everything else equal, what do these values imply?
a. The firm is less some of its short-term debt over the past year.
b. The firm has current assers than it did one yaer ago.
c. The frim is less liquid this year than it was last year
d. The probability of the encountering financial distress is less now than it was a year ago.
Answer: c. The frim is less liquid this year than it was last year
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