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Problem 2: Place an X in the column as follows: If you think the item will result in an increase, place the X in the
Problem 2: Place an "X" in the column as follows: If you think the item will result in an increase, place the X" in the + column If you think the item will result in a decease, place the "X" in the - column If you think the item will result in no change place the "X" in the NC column Ratio Effect on Ratio + NC A Current ratio Ratio Item Value Before the Item Occurred 3 to 1 Borrowed funds by issuance of bonds maturing at the end of 15 years 12 times All sales prior to the change were on per year "net due in 30 days" basis; after The change they are only "net due on 60 days" basis. B. Accounts Receivable Tumover C Times Interest Eamed D. Current Ratio Paid the total due on a significant 12 times loan 4 to 1 Sold a machine at 10% less than its book value. Sold a short-term investment and a 1.4 to 1 gain is recorded E. Quick Ratio Sold short-term investments at book value for cash F. Current Ratio 3 to 1
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