ANSWER QUICKLY AND CORRECTLY

Determine the effect of the following scenario on the Cash Flows to Sales Ratio: "A company begins contract negotiations in the middle of the current accounting period with a potential client. The contract being negotiated could yield the company up to several millions of dollars in service revenue." Deal ONLY with the facts provided in the scenario, and determine the direct effects of the scenario ONLY in the current period. Assume no effect on the market price of stock. Assume the Current Ratio prior to any scenario was 2:1. Cash Flows to Sales Ratio = Net Cash Flows from Operating Activities / Net Sales O The effect of this scenario DECREASES the ratio result. The effect of this scenario DOES NOT AFFECT the ratio result. O The effect of this scenario INCREASES the ratio result