Accounting · Financial Statement Analysis
Other factors remaining constant, a firm's short-term financial situation or liquidity position improves primarily:
- 1On an increase in current assets relative to current liabilities✓
- 2On an increase in short-term current liabilities
- 3When current assets and current liabilities decrease in equal proportions
- 4When long-term fixed liabilities are converted into short-term liabilities
Correct answer
On an increase in current assets relative to current liabilities
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