Quiz Ch 04 – T/F Manipulation of Ratios and Current Ratio

Fundamentals of Financial Management, Concise

Brigham and Houston

09th Edition

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True or false: A limitation of ratio analysis is susceptibility to manipulation. For instance, if our current ratio is under 1.0, settling a portion of current liabilities using available cash would result in an increased current ratio, potentially enhancing the firm's appearance of strength.

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