Question

sate whether the following statement are true or fslse. - Increase in current liabilities and decrease...

sate whether the following statement are true or fslse.

- Increase in current liabilities and decrease in current asset represents inflow cash.
- If an individual investor buys or sells a currently outstanding stock through a broker, this is a primary market transaction.
- Activity ratios explain the firm ability to use assets efficiently.
- Trade - Off between Risk - Return is the main principle to maximize the firm value.
- Reduce inventory and use the proceeds to pay off a part of current liabilities will lead to increase the quick ratio.
- Unethical Behavior of the manager includes using the information that not available to the public to make money

Homework Answers

Answer #1

1. TRUE. Increase in current liabilities and decrease in current assets represents inflow of cash.

2. FALSE. It is a secondary market tranaction.

3. TRUE. Activity ratios explain the firm's ability to use assets efficiently.

4. TRUE

5. TRUE. Quick ratio is given by :

Quick ratio = Current assets - Inventories / Current liabilities

In the above formula,when inventories in the numerator are decreased and current liabilities in the denominator are decreased, then quick ratio will increase.

6. TRUE

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
State whether the following statements are true or false. Within Corporation, one key value of limited...
State whether the following statements are true or false. Within Corporation, one key value of limited liability is that it lowers owners' risks and thereby enhances a firm's value. Money markets are markets for short-term debt securities. Negative net operating cash flow of firm means that the firm has solvency. Agency Problem creates when managers are acting on behalf of owners’ interest. Increase in current liabilities and decrease in current asset represents inflow cash. If an individual investor buys or...
Evaluate the following statements as TRUE or FALSE 1. Increase in current asset and a decrease...
Evaluate the following statements as TRUE or FALSE 1. Increase in current asset and a decrease in current Liabilities represents external flow cash. ( ) 2. Debt financing has a negative effect on the shareholders profit maximization. ( )
What is the Increase (Decrease) in Current Assets, Increase (Decrease) in Current Liabilities, and Increase (Decrease)...
What is the Increase (Decrease) in Current Assets, Increase (Decrease) in Current Liabilities, and Increase (Decrease) in Revenue? That Is all I need. Thank you. W & T Racket designs is the leading racquet company. They are known for their innovation of new technology for racquet sports. W & T is planning on implementing a new racquet into production to replace their old tour model racquet. The old model was very popular with most customers, but W & T wants...
1. Which of the following is not a true statement about effective ratio analysis? Ratios should...
1. Which of the following is not a true statement about effective ratio analysis? Ratios should NOT be used to compare across time or across firms. Ratios should be analyzed in isolation. Ratios are used by Managers to help evaluate the future as well as an attempt to gauge how to correct current deficiencies. Ratios are used by Bankers to evaluate the ability of the firm to maintain certain levels of debt and interest. Ratios are used by the owners...
Classify the following changes in each of the accounts as either an outflowor an inflowof cash....
Classify the following changes in each of the accounts as either an outflowor an inflowof cash. (1 Mark – 0.2 each)    Is a decrease in land and buildings an inflow or an outflow of​ cash? Is an increase in accounts payable an inflow or an outflow of​ cash? Is a decrease in vehicles an inflow or an outflow of​ cash? Is an increase in accounts receivable an inflow or an outflow of​ cash? Is the payment of dividends an...
Calculate the quick ratio using the following information. (Round to two decimal places.) Cash $50,000 Accounts...
Calculate the quick ratio using the following information. (Round to two decimal places.) Cash $50,000 Accounts receivable $130,000 Inventories $210,000 Prepaid assets $15,000 Current liabilities $200,000 a.0.98 b.2.50 c.0.90 d.1.35 The ability of a company to pay debts as they become due is best analyzed using: a.net cash flows from operating activities. b.accrual accounting. c.the cash inflows from financing activities. d.the cash basis of accounting. Which of the following is true of the accrual basis of accounting? a.Only individuals and...
1-25 True or False 1. Sales revenue is an inflow of assets. 2. The three distinct...
1-25 True or False 1. Sales revenue is an inflow of assets. 2. The three distinct types of cost to a manufacturer are direct materials, direct labor, and manufacturing overhead.                       3. Sales Returns and Allowances is a contra-asset account. 4. Like sales revenue, cost of goods sold represents an inflow of assets. 5. With the periodic inventory system the inventory account is updated after each sale or purchase. 6. When merchandise is sold FOB shipping point, the buyer is responsible...
The following statement is true is all respects: Organizations that make up the supply chain are...
The following statement is true is all respects: Organizations that make up the supply chain are “linked” together through physical, financial and information flows forming partnerships that add value to the customer experience. True False Flag this Question Question 3 1 pts Supply chain management is undergoing a level of transformation, not unlike other disciplines. Which of the selections below best represents this transformation. Business Logistics Physical Distribution Integrated Business Planning Its not transforming Flag this Question Question 4 1...
Background You are a manager in the audit division at Miller Yates Howarth (MYH), an accounting...
Background You are a manager in the audit division at Miller Yates Howarth (MYH), an accounting firm with offices throughout the major regional centres of NSW and Queensland. Although a medium sized firm by national standards, MYH is the second largest regional accounting firm in Australia. Most of MYH’s audit clients are in the agriculture, mining, manufacturing and property industries. All of those industries are currently under pressure, either from a downturn in commodity prices or fierce competition from overseas...
You are a manager in the audit division at Miller Yates Howarth (MYH), an accounting firm...
You are a manager in the audit division at Miller Yates Howarth (MYH), an accounting firm with offices throughout the major regional centres of NSW and Queensland. Although a medium sized firm by national standards, MYH is the second largest regional accounting firm in Australia. Most of MYH’s audit clients are in the agriculture, mining, manufacturing and property industries. All of those industries are currently under pressure, either from a downturn in commodity prices or fierce competition from overseas competitors....