Question 6.KC.1: Over the five-year period, the relative quantity of Best Buy...
Over the five-year period, the relative quantity of Best Buy’s liquidity has
a. Increased.
b. Decreased.
c. Not changed materially.
d. Cannot be determined.
a. Incorrect. This answer cannot be correct because these two ratios have decreased.
b. Correct. The current ratio and quick ratio have both decreased over this 5-year period, from 2.58 to 1.90 and 0.71 to 0.32, respectively. These two ratios measure the quantity of liquidity. Therefore, the liquidity decreased.
c. Incorrect. This answer cannot be correct because these two ratios have decreased.
d. Incorrect. The answer can be determined. See answer b.
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