Information for two companies in the same industry, Patton Corporation and Sager Corporation, is presented here.

Patton Sager Corporation Corporation Net cash provided by operating activities $ 80,000 $100,000 Average current liabilities 50,000 100,000 Average total liabilities 180,000 250,000 Net income 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.

AppendixLO1