Seeing is believing!
Before you order, simply sign up for a free user account and in seconds you'll be experiencing the best in CFA exam preparation.
Basic Question 10 of 12
Working capital is $45,000. If the firm gets $18,000 by issuing common stock, what will happen to the current ratio?
B. It will remain unchanged.
C. It will increase.
A. It will decrease.
B. It will remain unchanged.
C. It will increase.
User Contributed Comments 4
| User | Comment |
|---|---|
| accounting | the issuing of stock increases assets |
| nagri | To be more precise, it should increase current assets and not just assets and in this case cash is increased |
| SaeedAlam | I'm guessing it should increase debit cash on one side and credit contibuted capital on the other side? |
| george1803 | Issuing stock will increase Assets on one side Stockholders Equity on the other side, Therefore, the current assets go up while the current liabilities stay the same so answer C |
I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
Learning Outcome Statements
calculate and interpret common-size balance sheets and related financial ratios
CFA® 2025 Level I Curriculum, Volume 2, Module 3.