Examine the effect of the actions below on the current ratio. Assume that the prevailing current ratio is higher than 1.0.
(i) Use cash to pay off current liability of $10,000
(ii) Purchase raw materials amounting to $10,000 on credit
(iii) Sale of inventory
(iv) Paying a dividend

    

Period Start Period End Liquidity Ratios Cash Ratio Current Ratio Quick Ratio Leverage Ratios Total Debt/Equity Total Debt/Total Assets Long-Term Debt/Equity Long-Term Debt/Total Assets Turnover Ratios Accounts Receivable Turnover Days Sales Outstanding Profitability Ratios Operating Margin Profit Margin Return on Equity Return on Assets Market Value Ratios Price/Book Price/Sales Dividend Yield Share Price 03/21 09/20 09/21 03/21 09/20 03/20 2.28 2.72 2.49 5.06 72.13 03/20 09/19 03/19 09/19 1.41 1.69 1.57 0.68 4.88 67.47 88.07 71.27 121.08 33.97 38.15 30.83 34.96 62.45 79.48 62.11 88.68 34.43 26.86 31.44 25.60 5.03 1.11 1.30 1.22 -22.95 -29.92 -113.12 -29.60 -36.84 -212.13 -8.82 -33.87 -28.72 -4.07 -11.98 -11.47 0.28 0.44 0.35 4.77 8.51 15.05 76.59 42.99 24.31 0.16 0.41 0.32 1.03 0.67 0.73 5.36 0.68 0.43 1.62 1.62 5.23 5.55 3.47 4.04 71.90 27.76 60.89 23.51 11.51 31.71 -4.16 5.42 -5.46 2.47 -1.88 5.36 -0.66 2.29 0.92 0.65 3.31 6.38