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Case 8-12 Current Ratio The current ratio measures the relationship between current assets and current liabilities. Required : Monroe Company reported an increase in inventories

Case 8-12 Current Ratio

The current ratio measures the relationship between current assets and current liabilities.

Required:

Monroe Company reported an increase in inventories in the past year. Discuss the effect of this change on the current ratio (current assets current liabilities).

What does this tell a statement user about Monroe Companys liquidity?

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