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?

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CLEVELAND COMPRESSOR Balance Sheet 2015 2014 Cash Net accounts recelvable .. Total Liabilities and Equity $ 6,494 4,893 Notes payable Total current Ilabiltles Total $ 56,359 Total $174,794 CLEVELAND COMPRESSOR Income Statement 2015 Income: Sales Other Income 1,002 Total Income Operating expenses: Cost of goods sold Selling and administratve expenses.. 103,570 28,495 2,274 $134.339 Total expenses ARA Taxxes 14,890 ..ARE $ 4,677 PNEW YORK PNEUMATIC Balance Sheet 2015 2014 Net accounts recelvable . .. _ __. Total assets. Liabilities and Equity Less: Treasury stock PNEW YORK PNEUMATIC Income Statement 2015 Other Income Total Income . .. Cost of goods sold Total experses