The latest quarterly financial reports for XYZ Company revealed the values for 3 financial ratios:

Current Ratio = 0.9

Quick Ratio = 0.6

Equity Ratio = 0.2

In order to improve the firms financial health based on these three financial ratios, the companys management team has proposed the following 5 strategies for the current quarter. For each strategy, those lines from the Balance Sheet been affected are listed in the parentheses.

Strategy 1: Purchase new equipment with cash (Cash and Equipment)

Strategy 2: Reduce warehouse inventory level using Just-in-Time mechanism (Inventory)

Strategy 3: Payback short-term loans with retained earnings (Short-Term Liabilities and Retained Earnings)

Strategy 4: Purchase new equipment with a 6-month loan (Short-Term Liabilities and Equipment)

Strategy 5: Raise capital (in cash) by issuing more common shares that will be used to pay for

short-term debt (Cash, 'Short-Term Liabilities', and Common Shares)

Identify two strategies that will improve all three ratios (Current, Quick and Equity Ratios).

		Strategy 2 and Strategy 4
		Strategy 3 and Strategy 5
		Strategy 1 and Strategy 3
		Strategy 3 and Strategy 4
		Strategy 2 and Strategy 3