As of December 31, Year 1, Gant Corporation had a current ratio of 1.29, quick ratio of 1.05, and working capital of $18,000. The company uses a perpetual inventory system and sells merchandise for more than it cost. On January 1, Year 2, Gant issued common stock at par value for $10,000 cash. Which of the following statement is correct?
A. Gant's working capital will decrease.
B. Gant's current ratio will increase.
C. Gant's quick ratio will decrease.
D. Gant's current ratio will decrease.
Answer: B
You might also like to view...
The closing process involve(s):
a. reducing to zero the balance in each income statement account. b. debiting the revenue accounts. c. crediting the expense accounts. d. transferring to Retained Earnings the differences between total revenues and total expenses. e. all of the above.
The current ratio measures the ability of the company to pay its long-term liabilities as well as its short-term liabilities
Indicate whether the statement is true or false
The big risk of employing an outsourcing strategy is
A. hollowing out a firm's own capabilities and losing touch with activities and expertise that contribute fundamentally to the firm's competitiveness and market success. B. increasing the firm's risk exposure to both supply chain management failures and shifts in the composition of the industry value chain. C. putting the company in the position of being a late mover instead of an early mover. D. hurting a company's R&D capability. E. causing the company to become partially integrated instead of being fully integrated.
The variance of the returns of Stock X is 62.5%, and the expected return from the stock is 18%. Calculate the coefficient of variation of the stock. (Round your answer to two decimal places.)
A. ?3.47 B. ?0.44 C. ?0.29 D. ?2.27 E. ?1.82