Question 8.

Lincoln Industries' current ratio is 0.5. Considered alone, which of the following actions would increase the company's current ratio? Explain your choice.

a. Use cash to reduce long-term bonds outstanding.

b. Borrow using short-term notes payable and use the cash to increase inventories.

c. Use cash to reduce accruals.

d. Use cash to reduce accounts payable.

e. Use cash to reduce short-term notes payable.