Question
How does a rising current ratio generally affect the interpretation of liquidity?
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Answer
It generally indicates stronger short-term liquidity.
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Question
If inventory turnover is rising over time, what does that usually imply about operating efficiency?
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Answer
Inventory is moving faster, usually indicating better efficiency.
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Question
If the cash conversion cycle lengthens, what does that imply about liquidity?
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Answer
Liquidity is under more strain because cash is tied up longer.
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Question
Why can a rising DPO improve short-term liquidity?
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Answer
It delays cash outflows and preserves cash longer.
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