QUESTIONS 45 THROUGH 68 RELATE TO FINANCIAL STATEMENT ANALYSIS
45.
The current ratio for an industry is 3.2. Data for a firm in the industry is presented below:
As at December 31
£ ‘000s
Cash
200
Accounts receivable
350
Inventory
1,250
Accounts payable
300
Taxes payable
200
600
Installment loan payable, due in three equal annual
payments on June 30.
Using the current ratio, when compared with the industry, the firm is best described as being:
A. as liquid.
B. less liquid.
C. more liquid.