Suppose you are comparing two companies that are in the same line of business. Company C has
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Suppose you are comparing two companies that are in the same line of business. Company C has an operating cycle of 40 days, and CompanyD has an operating cycle of 60 days. Company C has a current ratio of 3, and Company D has a current ratio of 2.5. Comment on the liquidity of the two companies. Which company has more risk of not satisfying its near-term obligations? Why?
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