Exercise 3-20 (Static) Effect of management decisions on ratios [LO3-8) Most decisions made by management impact the ratios analysts use to evaluate performance Indicate (by letter) whether each of the actions listed below will immediately increase (0), decrease (D), or have no effect (N) on the ratios shown. Assume each ratio is less than 1.0 before the action is taken. 25 ints Current Ratio Acid-Test Ratio Debt to Equity Ratio B 02:32:40 D 1 Action 1. Issuance of long-term bonds 2. Issuance of short-term notes 3. Payment of accounts payable 4. Purchase of inventory on account 5. Purchase of inventory for cash 6. Purchase of equipment with a 4-year notes 7. Repayment of long-term notos payable 8. Issuance of common stock 9. Payment for advertising expense 10 Purchase of short-term investment for cash 11. Reclassification of long-term notos payable to current notos payable eBook ETTI EZTTTT LLLL LLLLLL lalalalzl NAN Print LLLLLLLLL SIE LLLL References z Exercise 3-20 (Static) Effect of management decisions on ratios [LO3-8) Most decisions made by management impact the ratios analysts use to evaluate performance Indicate (by letter) whether each of the actions listed below will immediately increase (0), decrease (D), or have no effect (N) on the ratios shown. Assume each ratio is less than 1.0 before the action is taken. 25 ints Current Ratio Acid-Test Ratio Debt to Equity Ratio B 02:32:40 D 1 Action 1. Issuance of long-term bonds 2. Issuance of short-term notes 3. Payment of accounts payable 4. Purchase of inventory on account 5. Purchase of inventory for cash 6. Purchase of equipment with a 4-year notes 7. Repayment of long-term notos payable 8. Issuance of common stock 9. Payment for advertising expense 10 Purchase of short-term investment for cash 11. Reclassification of long-term notos payable to current notos payable eBook ETTI EZTTTT LLLL LLLLLL lalalalzl NAN Print LLLLLLLLL SIE LLLL References z