A firm has a lower quick (or acid test) ratio than the industry average, which implies
A. the firm has a lower P/E ratio than other firms in the industry.
B. the firm is less likely to avoid insolvency in the short run than other firms in the industry.
C. the firm may be more profitable than other firms in the industry.
D. the firm has a lower P/E ratio than other firms in the industry, and the firm is less likely to avoid insolvency in the short run than other firms in the industry.
E. the firm is less likely to avoid insolvency in the short run than other firms in the industry, and the firm may be more profitable than other firms in the industry.
E. the firm is less likely to avoid insolvency in the short run than other firms in the industry, and the firm may be more profitable than other firms in the industry.
Current assets earn less than fixed assets; thus, a firm with a relatively low level of current assets may be more profitable than other firms. However, its low level of current assets makes it less liquid.
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