Page 171 - CAPE Financial Services Syllabus Macmillan_Neat

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44. McIntosh & Co. ‘s current ratio has been exhibiting an increasing trend over the past five

years but, its acid test ratio showed steady declines over the same period. This could be a
signal that the firm is
(A) experiencing problems in collecting receivables
(B) purchasing too many investment products
(C) carrying excess inventories
(D) depleting inventories
45. Which of the following would be the BEST option when assessing the profitability of a
company?
(A) Compare the company’s P/E to that of the industry’s P/E
(B) Review the trend of working capital
(C) Review the trend of ROI
(D) Calculate ROE

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