Both the current ratio and the quick ratio for Spartan Corporation have been slowly decreasing. For the past two years, the current ratio has been 2.3 to 1 and 2.0 to 1. During the same time period, the quick ratio has decreased from 1.2 to 1 to 1.0 to 1. The disparity between the current and quick ratios can be explained by which one of the following?
- The current portion of long-term debt has been steadily increasing.
- The cash balance is unusually low.
- The accounts receivable balance has decreased.
- The inventory balance is unusually high.
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Morgan Greenleaf
Marketing and Social Meda Manager
IMA
Montvale NJ
United States
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