Upon completion of the Required Readings, write a thorough, well-planned narrative answer to the following discussion question. Rely on your Required Readings and the Lecture and Research Update for specific information to answer the discussion question, but turn to your original thoughts when asked to apply, evaluate, analyze, or synthesize the information. Your Discussion Question responses should be both grammatically and mechanically correct and formatted in the same fashion as the questions themselves. If there is a Part A, your response should identify a Part A, etc. In addition, you must appropriately cite all resources used in your responses and document them in a bibliography using APA style.

Numerous technical adjustments can be made to short-term liquidity ratios, such as adjusting accounts receivable turnover for cash sales, accounting for LIFO liquidation in computing days in inventory, and replacing cost of goods sold with purchases when calculating accounts payable turnover. (20 points) (A 1½-page response is required.)

  1. Discuss one (1) determinant of a short-term liquidity ratio.
  2. Discuss when an analyst should make technical adjustments.
  3. Discuss four (4) instances when such adjustments would not be warranted.