Accounting 0452 · IGCSE · Interpretation of accounting ratios

Interpretation of accounting ratios — practice question

A company gave the following data for its current ratio. year 1: 2.3 : 1 year 2: 2.4 : 1 year 3: 2.5 : 1 What could account for the changes in the ratio?

  • AInventory is decreasing.
  • BOther payables are increasing.
  • COther receivables are increasing.
  • DTrade receivables are decreasing.

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