Answer to Question #133064 in Management for sandeep

Question #133064
7 Which of the following actions would NOT affect the Liquid Ratio of a firm?
( a ) Purchase inventory on credit
( b ) Sell fixed assets for cash
( c ) Sell inventory on credit
( d ) Declaring final dividend
( e ) All of the above would affect the Liquid Ratio.

8 Firms that exhibit current ratios substantially above the industry average may be holding ....................... amounts of cash, accounts receivable or inventory.
( a ) Insufficient
( b ) Excessive
( c ) Adequate
( d ) Uncertain
( e ) None of the above

9 A particularly low gross profit margin may indicate either a, ………..cost of goods sold or a …………. selling price.
( a ) Low; high
( b ) High; high
( c ) Low; low
( d ) High; low
( e ) None of the above

10 A firm that shows a particularly high inventory turnover ratio may experience:
( a ) A reduced return on assets
( b ) Stockouts and lost sales
( c ) A sudden increase in sales
( d ) A reduction in average outstanding receivables
( e ) All of the above
Expert's answer
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