Why might a very high current ratio actually indicate theres a problem with a firms inventory or

Question:

Why might a very high current ratio actually indicate there’s a problem with a firm’s inventory or accounts receivable management? What might be another reason for a high current ratio?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Foundations Of Finance

ISBN: 9781292155135

9th Global Edition

Authors: Arthur J. Keown, John D. Martin, J. William Petty

See More Books

Question Posted: Feb 21, 2024 05:00 AM

See More Questions

The Crazy Eddie fraud may appear smaller and gentler than the massive billion-dollar frauds exposed in recent times, such as Bernie Madoffs Ponzi scheme, frauds in the subprime mortgage market, the...
importance of workalike balance for women as a leader in healthcare. 1. The purpose of the research; 2. Research question/s; 3. Findings and relevant data; 4. Any recommendations and; 5. The...
Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...
Write a program MooresLaw that takes a command-line argument $n$ and outputs the increase in processor speed over a decade if microprocessors double every $n$ months. How much will processor...
In Exercises 1-4, rewrite the logarithm as a ratio of (a) Common logarithms and (b) Natural logarithms. 1. log5 16 2. log1/5 4 3. logx 3/10 4. log2.6x
Category Prior year Current year Accounts payable 41,400 45,000 Accounts receivable 115,200 122,400 Accruals 16,200 13,500 Additional paid in capital 200,000 216,660 Cash ??? ??? Common Stock @ par...
On January 1,2009, Marshall Company acquired 100 percent of the outstanding common stock of Tucker Company. To acquire these shares, Marshall issued $200,000 in long-term liabilities and 20,000...
Assume a stock has a value of $100. The stock is expected to pay a dividend of $2 per share at year-end. An at-the-money European-style put option with one-year maturity sells for $7. If the annual...
You just graduated college with your Bachelors Degree and accepted a job offer at your dream company. You decided to celebrate by purchasing a Tesla Model S (see picture above) for $72,800. You have...
Why might a successful (liquid) firm have an acid-test ratio that is less than 1?
Describe the two perspectives available for measuring liquidity.
Give an example set of 8 characters and their associated frequencies so that the Huffman tree for this set is a complete binary tree.
What are knowledge or innovation workers? What are the key elements of professional practice, work environment and work design needed to support the productivity and creativity of knowledge or...
What problem does this concept solve or what pain does it alleviate and how compelling is the problem? 2. Who is your specific target customer? 3. How do they currently meet this need for themselves...
Consider a person standing in a room where the average wall temperature is 20 C. This person is trying to reach the "thermal comfort" by adjusting the A/C air temperature. Find out the appropriate...
If WHO, the World Health Organization,defines health as a state of completephysical, mental and social well-being and not merely the absenceof disease and infirmity (WHO, 2011)and wellness is...
As a manager, you want to find a way to motivate Nate and increase his engagement and job satisfaction in the workplace. Drawing upon a behavioral theory of motivation, discuss how you, as a manager,...
One year of world production of gold was 49.6 106 troy ounces. One troy ounce equals 31.10 g. What was the world production of gold in metric tons (106 g) for that year?
What is the difference between the straight-line method of depreciation and the written down value method? Which method is more appropriate for reporting earnings?
Why is the examination of only the balance sheet and income statement not adequate in evaluating a firm?
Why are dividends paid to a firms owners not a tax-deductible expense?
See the annual report for the Dell Corporation by going to www.dell.com. Scroll to the bottom of the page, then click About Dell, then Investors, and finally the link Annual Reports. Scan the list to...
Suppose I have computed the cost of carbon per mile for my car at 0 . 0 1 2 per mile. Assume that the interest rate is 4 % and that I drive the car 2 8 , 0 0 0 miles per year. What is the present...
Imagine that in stable growth period, the firm earns ROIC of 10% and has after tax EBIT of 200 and reinvestment $ of 40. What is the steady state growth rate? 20% O 10% 2%
Tanner-UNF Corporation acquired as a long-term investment $160 million of 5.0% bonds, dated July 1, on July 1, 2021. Company management has the positive intent and ability to hold the bonds until...

Why might a very high current ratio actually indicate theres a problem with a firms inventory or

Question:

Step by Step Answer:

While a high current ratio is generally considered a positive sign indicating a companys ability to cover its shortterm ...View the full answer

Foundations Of Finance

Students also viewed these Business questions