On December 30, 2006, Vida Co. had cash of $200,000, a current ratio of 1.5:1 and a quick ratio of .5:1. On December 31, 2006, all cash was used to reduce accounts payable. How did these cash payments affect the ratios?
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|
Current ratio |
Quick ratio |
|
|
a. |
Increased |
Decreased |
|
b. |
Increased |
No effect |
|
c. |
Decreased |
Increased |
|
d. |
Decreased |
No effect |