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Which of the following generally indicates a positive change? The number of days' sales in receivables...

Which of the following generally indicates a positive change?

The number of days' sales in receivables decreases.
The times-interest-earned ratio decreases.
The inventory turnover ratio decreases.
The current ratio decreases.
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Answer #1

1) number of days sales in receivables decrease is a positive change because business working capital need decreases so it does not have to borrow funds and pay interest on working capital

2)times interest earned ratio decreasing is not a positive change because it measure the business ability to meet interest expense in future so decrease of that ratio is a negitive change

3) inventory turnover ratio decrease is a negitive change because low inventory turnover ratio indicates less demand for products that company produces

4) current ratio decrease is a negitive change because it indicates reduced ability of business to meet current liabilities

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