Fantastic Foods Ltd completed a series of transactions, which are listed below. Before the transactions, both the current and quick asset ratios were greater than 1. The cash account has a debit balance.

Indicate the effect of each of the transactions listed on the ratio listed opposite it. For each transaction, state whether the ratio would increase, decrease or have no effect. Treat each transaction independently.

Transaction Ratio 1 Redeemed debentures by issuing ordinary shares Return on equity 2 Purchased inventory on credit Quick ratio 3 Sold inventory for cash with a 40 per cent mark-up on cost Current ratio 4 Issued additional ordinary shares for cash Debt-to-equity ratio 5 Collected an account receivable balance Debtors turnover 6 Paid accounts payable Return on assets 7 Paid accounts payable Profit margin