which of the of the following would increase a company current ratio?

Answer 1

Increasing Cash Reserves: If a company holds more cash or cash equivalents, it will increase its current assets, which would raise the current ratio.

Reducing Short-Term Debt: Paying off or reducing short-term debt, such as Accounts Payable or short-term loans, will decrease current liabilities, resulting in a higher current ratio.

Increasing Accounts Receivable Collections: If a company collects outstanding accounts receivable more promptly, it will increase its cash or current assets, which can raise the current ratio.

Decreasing Inventory Levels: Reducing excess inventory can decrease current assets, but it can also reduce current liabilities if the company has short-term loans secured by inventory. This can potentially increase the current ratio.

Increasing Current Assets: By increasing any of the current assets, such as accounts receivable, prepaid expenses, or marketable securities, without a corresponding increase in current liabilities, the current ratio will go up.

Restructuring or Refinancing Short-Term Debt: If a company restructures or refinances its short-term debt to extend maturity dates, it can reduce the current portion of long-term debt, which would decrease current liabilities and raise the current ratio.