Decrease working capital and decrease book value per share

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Reference no: EM131491737

Fact Pattern: Calculation of ratios and the determination of other factors are considered important in analysis of financial statements. Prior to the independent events described below, the corporation concerned had current and quick ratios in excess of one to one and reported a net income (as opposed to a loss) for the period just ended. Income tax effects are to be ignored. The corporation had only one class of shares outstanding.The effect of recording a 2-for-1 stock split is to

Decrease the current ratio, decrease working capital, and decrease book value per share.

Leave working capital unaffected, decrease earnings per share, and decrease the debt-to-equity ratio.

Leave working capital unaffected, decrease earnings per share, and decrease book value per share.

Leave inventory turnover unaffected, decrease working capital, and decrease book value per share.

Reference no: EM131491737

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