Which of the following would NOT improve the current ratio? le.

Answer(A) is the correct answer

A clearly is the answer . Because all options do improve the finance section except option a.

Issue long-term debt to buy inventory Because this is the only one which will increase current assets without increasing current liabilities. Current Ratio = current assets /current liabilities

Borrow short term to finance additional fixed assets

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The only logical answer is option A because all other options seem to improve the finance section except option A.

Borrow short term to finance additional fixed assets

would NOT improve the current ratio

Sell common stock to reduce current liabilities

Borrow short term to finance additional fixed assets.

(A) is the Ans.

 

Short term Borrowing to finance the additional fixed assets.

The answer would be to Borrow short term to finance additional fixed assets.

>>>>>>>>>>>Borrow short term to finance additional fixed assets.