There will be a decrease in the current ratio and no change in working capital when the cash is paid for the accounts payable.
What is current ratio?
The current ratio is the ratio analytical tool that determines the position of an organization to fulfill the demands of its short-term capital and fund requirements during the current financial year or period.
The current ratio is negatively affected by the use of cash to pay the liabilities like payables and short term loans. However, there is no such effect on the working capital when cash is used for the same.
Hence, option A holds true regarding the effect on current ratio and the working capital of Crane is aforementioned. The complete question has been attached as an image for better reference.
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