You have been provided with the following information about two companies: Required: a. Calculate the current ratio
Question:
Required:
a. Calculate the current ratio for each company and the amount of working capital each company has.
b. Which company has a stronger liquidity position? In responding consider the com-position of the accounts used to calculate the current ratio in addition to the current ratioitself.
Transcribed Image Text:
Company B 15 410 255 170 195 60 Company A Cash Accounts receivable Inventory Short-term bank loan Accounts payable and accrued liabilities Customer deposits $ 90 375 200 225 170 60
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a Company A Current Ratio 9037520022517060 146 Working Capital 665 455 210 Company B Current Ratio 1...View the full answer
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