Question: Assume that the industry average for the current ratio is 1.5 for 2021. Compare this industry average with the current ratios of Star Company and

Assume that the industry average for the current ratio is 1.5 for 2021. Compare this industry average with the current ratios of Star Company and Novs Company below 11 Star Company's current ratio for 2021 is 2.6. Nova Company's current ratio for 2021 is 2.0. What is the correct interpretation of these ratios? Multiple Choice Nova Company is better able to pay its current liabilities as they come due than Star Company and is better able to pay its current liabilities than the average company in the industry. Star Company is better able to pay its current liabilities as they come due than Nova Company but is less able to pay its current liabilitiem than the average company in the industry, Nova Company is better able to pay its current liabilities as they come due than Star Company but is less able to pay its current liabe than the average company in the industry. Star Company is better able to pay its current liabilities as they come due than Nova Company and is better able to pay its curr liabilities than the average company in the industry. porte 2012rss

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Sebastian Trains Co (ST) is a UK based rail operating company which holds three UK rail franchises. The franchises allow ST to run trains on the rail network in a particular geographical area within...

Assume that the industry average for the current ratio is 2.6 for 2021. Compare this industry average with the current ratios of Star Company and Nova Company, below: Star Company's current ratio for...

Assume that the industry average for the current ratio is 15 for 2020. Compare this industry average with the current ratios of Star Company and Nova Comaan below: Star Company's current ratio for...

Assume that the industry average for the current ratio is 1.4 for 2021. Compare this industry average with the current ratios of Company A and Company B below: --Company A's current ratio for 2021 is...

After recording all of the transactions for the first year for Maltese Co . the 2 A . In doing your research you discover that the industry average for the current ratio is 1 . 5 and the industry...

Morning Star Canoe & Kayak Company: Analysis of Financial Statements In the fall of 2021 , Sue Macintosh, owner of the Morning Star Canoe & Kayak Company , approached a local bank for additional...

A B D E F G H 1 2 3 The company below is a large manufacturer and distributor of electronic components. Because of some successful new products marketed to manufacturers of computers and mobile...

please answer the questions in the attachment. the attachment is provided below. thank you. 1 According to the Generally Accepted Accounting Principles, costs are: recorded when paid. expensed as...

(MBA 5220)(Please type the answer) Use pro forma sources and uses of funds statement on page 86 and rules about Sources and Uses of Funds (Funds Flow) Statement on page 13 of word lecture notes. The...

CRONCO REGIONALis a leading construction company founded in 2001 & is based in Babardos. The business entity has within recent years have been encountering increases in revenues from its...

part 1 is done but i need help on 2 and 3 Problem #3 The condensed balance sheet and income statement for Major Company are presented below. MAJOR COMPANY Balance Sheet At December 31, 2019 Cash...

The purchases journal for Keep Kleen Window Cleaners Inc. is shown below. The accounts payable control account has a January 1, 2008, balance of $265 of an amount due from Lawson Co. There were no...

Let R be the relation on the set of people consisting of pairs (a, b), where a is a parent of b. Let S be the relation on the set of people consisting of pairs (a, b), where a and b are siblings...

Finally, this multinational corporation has been asked to lend money for a major commercial real estate development in a foreign country. At the same time, there have been reports of a further...

last two options for the multiple choice are : performance management development A construction equipment manufacturer, Roswell Corporation, is focusing on becoming a leader in sustainability in...

(Appendices) International Studies Using the Internet, compare the value of the dollar to the value of worldwide currencies. Find the value of the Japanese yen, British pound, Chinese yuan, Euro,...

(Appendices) A luncheon speaker stated, most firms have a strong financial incentive to reduce occupational injuries because the indirect costs of workplace accidents can exceed the employers direct...

(Appendices) Research Perform research to find a recent news story about a business that used deceptive marketing practices, such as price fixing, bait and switch, fake sales, low-balling, or another...