Which of the following statement is correct?

1. All the answers are correct.

2. If inventory is purchased with cash, then the current ratio decreases.

3. Total asset turnover is a measure of the firms current assets being used efficiently, and also showing how well the firm manages its equity.

4. Liquidity is the ability to convert assets to cash quickly even if there is a significant loss in value.

5. Depreciation and amortization is a noncash deduction.