Share
Explore BrainMass

Effect on cash levels and current ratio

Indicate the effect of the following actions on cash levels and current ratio. Assume the company has a current ratio greater than one. Indicate whether the effect is to increase (I), decrease (D), or if it has no effect (NE). Consider each action independent from the others.

Current Ratio Cash

Sell accounts receivable at face value

Pay suppliers more slowly

Sell equity

Change from FIFO to weighted average inventory

Increase bad debt expense

Solution Preview

Indicate the effect of the following actions on cash levels and current ratio. Assume the company has a current ratio greater than one. Indicate whether the effect is to increase (I), decrease (D), or if it has no effect (NE). Consider each ...

Solution Summary

Solution discusses the effect of the following actions on cash levels and current ratio

$2.19