Information for two companies in the same industry, Linn Corporation and Nye Corporation, is presented here.

Linn Nye Corporation Corporation Cash provided by operating activities $150,000 $150,000 Average current liabilities 50,000 100,000 Average total liabilities 200,000 250,000 Net earnings 200,000 200,000 Capital expenditures 40,000 70,000 Dividends paid 5,000 10,000 Instructions Using the cash-based measures presented in this chapter, compare the

(a) liquidity and

(b) solvency of the two companies.