Which of the following would increase the current ratio?

The current ratio is a liquidity measure that evaluates a company's ability to pay its short-term obligations with its short-term assets. It is calculated by dividing current assets by current liabilities. When current assets increase while current liabilities remain constant or do not increase proportionally, this results in a higher current ratio.

Increasing current assets enhances the capacity to cover current liabilities, thereby indicating better liquidity. For example, if a business increases its inventory or accounts receivable, it now possesses more assets that can be converted to cash or used to meet short-term obligations.

In contrast, the other options do not positively affect the current ratio in the same way. Increasing current liabilities would raise the denominator in the current ratio, thereby decreasing it, while decreasing cash reserves implies a reduction in current assets, negatively impacting the ratio. Also, increasing long-term debt does not directly affect current assets or liabilities; rather, it may alter the overall leverage and financial structure but does not improve the current ratio as it has no direct impact on current assets alone.