The financial statements of the
business show a low concentration of inventory at the beginning of its sales
cycle with an equally low concentration of receivables at the end of the sales
cycle. The inventory and receivable levels are indicative of …

Question

Answer

a stable liquidity position throughout the sales cycle.

Answer

an unfavourable asset test ratio at the beginning of the sales cycle.

Answer

a strained working capital position at the beginning of the sales cycle.

Answer

a good solvency position throughout the sales cycle.

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The financial statements of the business show a low concentration of inventory ...

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