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The King Carpet Company has $ 3 , 1 7 0 , 0 0 0 in cash and a total of $ 1 1 ,

The King Carpet Company has $3,170,000 in cash and a total of $11,540,000 in current assets. The firm's current liabilities equal $5,580,000 such that the firm's current ratio equals 2.1. The company's managers want to reduce the firm's cash holdings down to $1,170,000 by paying $539,000 in cash to expand the firm's truck fleet and using $1,461,000 in cash to retire a short-term note. If they carry this plan through, what will happen to the firm's current ratio?

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