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Problem: Which of the following is correct? a. The year-end balance in the inventories account reliably and accurately represents the average level of inventories for the entire year. b. Ratios can be artificially manipulated with “window dressing” techniques. c. Ratio analysis is very useful because it allows us to accurately compare two firms in completely different industries. d. The firm should always strive to keep its current ratio as high as possible.

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Which of the following is correct?

a. The year-end balance in the inventories account reliably and accurately represents the average level of inventories for the entire year.

b. Ratios can be artificially manipulated with “window dressing” techniques.

c. Ratio analysis is very useful because it allows us to accurately compare two firms in completely different industries.

d. The firm should always strive to keep its current ratio as high as possible.

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