Question
Hi! I'm working on the following problem and would like some help:Most decisions made by management impact the ratios analysts use to evaluate performance. Indicate
Hi! I'm working on the following problem and would like some help: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 (I), decrease (D), or have no effect (N) on the ratios shown. Assume each ratio is less than 1.0 before the action is taken.
Ratios:
Current ratio, Acid-test ratio, Total debt to equity ratio 1-prepay rent for three months 2-cash sale of land for a gain 3-purchase of inventory on account 4-collection of an account receivable 5-refinancing currently maturing debt for five more years 6-purchase advertising on 30-day credit 7-payment of recently accrued income taxes 8-cash sale of inventory for a profit 9-purchase of warehouse with a 6 - month note 10-issuance of long-term debit for cash
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