Multiple Choice
As of December 31, 2012, Grove Corporation had a current ratio of 1.29, quick ratio of 1.05, and working capital of $18,000. The company uses a perpetual inventory system and sells merchandise for more than it cost. On January 1, 2012 Grove issued common stock for $10,000 cash. Which of the following statement is true?
A) Grove's current ratio will increase.
B) Grove's current ratio will decrease.
C) Grove's quick ratio will decrease.
D) Grove's working capital will decrease.
Correct Answer:
Verified
Correct Answer:
Verified
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