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YHW is a company that manufactures electrical components in Y-land. YHW has a positive cash balance and a current ratio of 0.9. As YHW is
YHW is a company that manufactures electrical components in Y-land. YHW has a positive cash balance and a current ratio of 0.9. As YHW is a slow payer, the supplier of YHW's most-used raw material has just reduced YHW's credit terms but maintained YHW's credit limit. This has resulted in a large invoice becoming immediately payable. There is no alternative supplier of this raw material and YHW intends to maintain its existing order quantities. Following the supplier's action, which two of YHW's ratios are most likely to decrease? Solution A.Payables payment period. B.Gross profit margin. C.Quick ratio. D.Interest cover. E.Return on capital employed
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