Can you re weite in your own words? Plz change the sentence (but same meaning with the picture).

*This is an answer but i cant copy so plz re-write again. The computer will test the similarity.

The quick ratio can have a number of alternatives based around the above formula. Consider each ratio element in turn and hold the other elements constant. If inventory increases then the working capital ratio increases but the acid ratio and cash flow ratio remain unaltered. If other current assets (i.e., current assets - inventory) decrease then acid test and working capital decreases and cash flow ratios are unaltered. If operating cash flows decrease then the cash ratio falls, but there is no impact on acid ratio or the working capital ratio. Hence one scenario is that the increase in inventory must be greater than the decrease in other current assets and operating cash flows have decreased. Assume operating cash flows are constant or there is a net increase in current liabilities. COM Linghangbuxi 2 2 If current liabilities increase then all ratios decrease. Hence, the second scenario is that the increase in inventory must be greater than the combined effects of the decrease in other current assets and the decrease in current liabilities