2. Liquidity ratios A liquid asset can be converted quickly to cash with little sacrifice in its value Which of the following asset classes is generally considered to be the least liquid? Aa Aa O Cash Accounts receivable Inventories The most recent data from the annual balance sheets of Pellegrini Southern Inc. and Jing Foodstuffs Inc. are as follows Balance Sheet December 31st (Millions of dollars) Pellegrini Foodstuffs Southern Jing Jing Foodstuffs Inc Pellegrini Southern Inc. Inc. Assets Current assets Liabilities Current liabilities Cash Accounts receivable Inventories $4,305 1,575 4,620 10,500 $2,767 Accounts payable $0 949 5,379 6,328 7,734 14,062 1,013 Accruals 2,970 6,750 Total current liabilities Notes payable Total current assets Net fixed assets Net plant and equipment 5,062 5,062 6,188 11,250 Long-term bonds 8,250 8,250 Total debt Common equity Common stock 3,047 1,641 4,688 18,750 2,438 1,312 3,750 15,000 Retained earnings Total common equity Total liabilities and equity Total assets 18,750 15,000 Pellegrini Southern Inc.'s quick ratio is , and its current ratio is Jing Foodstuffs Inc.'s quick ratio is , and its current ratio is Which of the following statements are true? Check all that apply Jing Foodstuffs Inc. has a better ability to meet its short-term liabilities than Pellegrini southern Inc., If a company's current liabilities are increasing faster than its current assets, the company's liquidity position is weakening If a company has a quick ratio of less than 1 but a current ratio of more than 1 and if the difference between the two ratios is large, then the company depends heavily on the sale of its inventory to meet its short-term obligations. Compared to Pellegrini Southern Inc., Jing Foodstuffs Inc. has less liquidity and a lower reliance on outside cash flow to finance its short-term obligations An increase in the current ratio over time always means that the company's liquidity position is improving One of the most important assumptions behind the calculation of the quick ratio is that the firm's accounts receivable converted into cash within the time period for which credit was granted be