When the trend of the current ratio (current assets divided by current liabilities) is increasing, it suggests that the firm's overall liquidity position is improving. On the other hand, when the trend of the acid-test ratio (quick assets divided by current liabilities) is decreasing, it indicates a decline in the firm's ability to meet its short-term obligations without relying on inventory. If the firm is depleting its inventories (option a), it would likely result in a decrease in both the current ratio and the acid-test ratio. Option b, having trouble collecting receivables, would mainly impact the accounts receivable turnover ratio but not necessarily the acid-test ratio. Option c, purchasing too much treasury stock, would not directly impact the liquidity ratios. Therefore, option d, carrying excess inventories, is the most appropriate warning indicated by the given trends. It suggests that the firm may have an inefficient inventory management system or that demand for its products has decreased.
The maximum foreign direct investment (FDI) allowed in Indian insurance companies is:
New India Assurance Co Ltd is a type of ?
Which type of risks are not insurable ?
What is the ceiling of annual premium in a Micro Variable Insurance Product?
A policy that covers the loss of money in transit is:
As per the Consumer Protection Act, 1986, who cannot be classified as a consumer?
An independent professional person registered under the Insurance Act who represents the insurance buyer to purchase the insurers policy is known as?
In which year New India Assurance Co Ltd nationalized?
The Insurance Ombudsman was established to:
General Insurance Corporation of India (GIC) was established in:
