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Study the following balance sheet to help you prepare for your upcoming interview for an entry-level analyst position at Extensive Enterprise Inc.. Extensive Enterprise Inc.

Study the following balance sheet to help you prepare for your upcoming interview for an entry-level analyst position at Extensive Enterprise Inc..

Extensive Enterprise Inc. Balance Sheet

Cash $525,000 Accounts payable $1,260,000
Accounts receivable $1,837,500 Accruals $787,500
Inventory $2,887,500 Notes payable $1,102,500
Total current assets $5,250,000 Total current liabilities $3,150,000
Long-term debt $17,850,000
Total debt $21,000,000
Common equity $4,200,000
Net plant and equipment $29,750,000 Retained earnings $9,800,000
Total equity $14,000,000
Total assets $35,000,000 Total liabilities and equity $35,000,000

During your interview for an introductory-level analyst position at Extensive Enterprise Inc., the interviewer asks you to complete the following table using the information provided in the preceding balance sheet.

Net Working Capital (5,250,00, 35,000,000, 3,150,000, 2,100,000)
Current Ratio ( 0.09, 0.25, 1.67, 11.11)

Assume that Extensive Enterprise Inc. decides to acquire an additional $1,750,000 in inventories and pay using its accounts payable. Given the condition of the company noted in the balance sheet, this activity should be expected to cause Extensives current ratio to _______________ . ( Increase , Decrease or Stay the same)

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