On July 5th, Herman Industries purchased inventory on account for $5,000. On July 20th, before repaying its supplier, Herman sells the inventory to a customer on account for $8,000. Herman regularly maintains an Accounts payable balance with its suppliers, as well as long-term debt bearing interest.

Five ratios are listed below. Four of the five are guaranteed to increase as a result of the July 20th transaction. Which one is not?

Multiple Choice

• Quick ratio- increase

• Profit margin.

• Times interest earned

• Current ratio- increase

• Earnings per share