Accounting · Financial Ratio Analysis
Consider the following statements regarding financial performance ratios: Statement (i): If the gross profit margin of a business improves, then the current ratio will always automatically improve. Statement (ii): If a bonus issue of shares is made from reserves, this capitalization will have no direct impact upon the current ratio. Determine which of these statements is/are true.
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Both (i) and (ii) are false
- 2Only (i) is true
- 3Only (ii) is true✓
- 4Both (i) and (ii) are true
Correct answer
Only (ii) is true
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