General hospital has a current ratio of 0.5. Which of the following actions would improve (increase) this ratio? (Hint: Create a simple balance sheet that has a current ratio of 0.5. Then, judge how the transactions below would affect the balance sheet. )
1. Use cash to pay off current liabilities
2. Collect some of the current accounts receivable
3. Use cash to pay off some long term debt.
4 . Purchase additional inventory on credit (i.e., accounts payable).
5. Sell some of the existing inventory at cost (book value).
b. Now assume that General Hospital has a current ratio of 1.2.In this situation which of the above actions would improve this ratio?