Accounting 0452 · IGCSE · Interpretation of accounting ratios

Interpretation of accounting ratios — practice question

A company supplied the information below about its current ratio. year 1: $2.3 : 1$ year 2: $2.4 : 1$ year 3: $2.5 : 1$ What might account for the changes in this ratio?

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

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