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A company always maintains a positive cash balance
Which of the following statements relating to the company’s liquidity ratios is/are true?
(1) If the accounts payable payment period reduces, the acid test (quick) ratio will increase
(2) The acid test (quick) ratio will never be higher than the current ratio
(3) If the inventory turnover period increases, the current ratio will reduce
1 and 2
2 and 3
i am asking this question again because in previous answer you said both statements 2 and 3 are incorrect, yet the answer given by you mentioned both the statements as what they said. so do you mean to say that 2 and 3 are correct aswell? please let me know the question asks which of the statements are correct
In my previous reply, I said that (2) was correct, and that (3) was not correct.