Ch 3 Homework The most recent data from the annual balance sheets of Fitcom Corporation and Zebra Paper Corp. are as follows: Balance Sheet December 31 (Millions of dollars) Fitcom Corporation Zebra Paper Corp. Fitcom Zebra Paper Corp. Corporation Liabilities Current liabilities $1,845 $0 $0 $2,870 1,050 3,080 Accounts payable Accrua 675 633 Assets Current assets Cash Accounts receivable Inventories Total current assets Net fixed assets Net plant and equipment 0 3,586 3,375 7,000 1,980 4,500 Notes payable Total current liabilities 3,375 4,219 5,156 Long-term bonds 5,500 5,500 4,125 7,500 Total debt 9,375 2,031 1,625 825 Common equity Common stock Retained earnings Total common equity Total liabilities and equity 1,094 3,125 12,500 Total assets 2,500 10,000 12,500 10,000 Zebra Paper Corp.'s current ratio is and its quick Fitcom Corporation's current ratio is and its quick ratio is ratio is Note: Round your values to four decimal places. Which of the following statements are true? Cher all that any CENGAGE MINDTAP Ch 3 Homework equipment Common equity Common stock 1,625 2,031 1,094 3,125 Retained earnings Total common equity 875 2,500 Total assets 12,500 10,000 Total liabilities and 12,500 10,000 equity Zebra Paper Corp.'s current ratio is and its quick Fitcom Corporation's current ratio is and its quick ratio is ratio is Note: Round your values to four decimal places. Which of the following statements are true? Check all that apply. Fitcom Corporation has less liquidity but also a greater reliance on outside cash flow to finance its short-term obligations than Zebra Paper Corp.. A current ratio of 1 indicates that the book value of the company's current assets is equal to the book value of its current liabilities If a company has a quick ratio of less than 1 but a current ratio of more than 1 and if the difference between the two ratios is large, then the company depends heavily on the sale of its inventory to meet its short-term obligations Fitcom Corporation has a better ability to meet its short-term liabilities than Zebra Paper Corp An increase in the current ratio over time always means that the company's liquidity position is improving. be converted into One of the most important assumptions behind the calculation of the quick ratio is that the firm's accounts receivable cash within the time period for which credit was granted. Grade It Now Save & Continue