You are analyzing financial ratios for a company (i.e., like we did with Coke). You notice that their current ratio is above 1.0 and is about the same as the other firms in their industry. Their quick ratio is substanitally lower than the industry average. How would you interpret this?

Multiple Choice

a. While liquidity may be a slight concern, this is rather unlikely to affect the firm's profitability.

b. The company's liquidity is not a concern, since the current ratio is above 1.0.

c. The company may not have enough inventory to meet customer demand.

d. The company is likely taking longer to sell their inventory than other companies in their industry.

e. The company is likely to be facing bankruptcy soon, since they will be unable to make their debt payments.