Suppose you are comparing two firms that are in the same line of business. Firm C has

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Suppose you are comparing two firms that are in the same line of business.

Firm C has an operating cycle of 40 days, and D has an operating cycle of 60 days. Firm C has a current ratio of 3, and D has a current ratio of 2.5. Comment on the liquidity of the two firms. Which firm has more risk of not satisfying its near-term obligations? Why?

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