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A company shows common size comparisons for two years on balance sheets. There is almost a two-fold increase in cash and equivalents, a 3% decrease in inventories, a small decrease in net property and equipment, and a large increase in retained earnings.

What does this data indicate about the company?

A. Its financial strength has improved.
B. Its financial strength has deteriorated.
C. It is failing to maintain its financial strength and should have serious concerns about its net income.
D. It is a stable company but it should be concerned about the performance of its assets in relation to income

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9415769

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