Business Finance -Networking Capital

Which of the following is most likely to occur if a firm over-invests in net working capital?  Why? (Explain your response)

  • The times interest earned ratio will be lower than it should be.

  • The current ratio will be lower than it should be.

  • The quick ratio will be lower than it should be.

  • The return on investment will be lower than it should be.

 
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