Current ratio, quick ratio, DE problem

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If my current ratio is 2 and my quick ratio is 1, what happens if I pay with cash my short term payables; what happens with my current ratio, quick ratio and D/E ?
I know (or hardly assume) that they both increase and the D/E decreases…. but I dont know why? Please help!
 
Try making up your own numbers for a balance sheet, then see what happens.
Make them simple:
  • Cash: 10
  • A/R: 30
  • A/P: 5
  • and so on
Believe me: you’ll benefit a lot more by doing this yourself than by reading an answer here.
 
S2000magician wrote:
Try making up your own numbers for a balance sheet, then see what happens.
Make them simple:
  • Cash: 10
  • A/R: 30
  • A/P: 5
  • and so on
Believe me: you’ll benefit a lot more by doing this yourself than by reading an answer here.
Click to expand...
This is the best way to do it. Whenever you’re struggling to understand something, just write it out. Because you figure it out on your own, you’ll understand it better.
 
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