Cleveland Compressor and Pnew York Pneumatic are competing manufacturing firms. Their financial statements are printed here. 

a. How are the current assets of each firm financed? 

b. Which firm has the larger investment in current assets? Why? 

c. Which firm is more likely to incur carrying costs and which is more likely to incur shortage costs? Why? 

Transcribed Image Text:

CLEVELAND COMPRESSOR Balance Sheet 2018 2019 Assets Current assets: Cash $ 16,339 $ 13,862 Net accounts receivable 25,778 23,887 Inventory 43,287 54.867 Total current assets $ 85,404 $ 92,616 Fixed assets: Plant,