One problem with ratio analysis is that relationships can be manipulated. For example, we know that if our current ratio is less than 1.0, then using some of our cash to pay off some of our current liabilities would cause the current ratio to increase and thus make the firm look stronger.
Answer the following statement true (T) or false (F)
False
Rationale: The key here is to recognize that if the CR is less than 1.0, then a given reduction in both current assets and current liabilities would lead to a decrease in the CR. The reverse would hold if the initial CR were greater than 1.0. In the question, the initial CR is less than 1.0, so using cash to reduce current liabilities would lower the CR. If the CR were greater than 1.0, the statement would have been true. Here's an illustration:
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What will be an ideal response?
Compare and contrast the institutional and regulation schools of social responsibility
What will be an ideal response?
Carson's little brother Colby joined the Boy Scouts recently. Carson notices that in addition to wearing the Boy Scout uniform, Colby has been better about keeping his everyday clothes neat and clean, has been searching online for camping gear, and has become interested in "green" products. Carson believes that the Boy Scouts are now a reference group for Colby because he
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Standard & Poor's and Mergent both publish extensive data on bonds
Indicate whether the statement is true or false.