2. Liquidity ratios A liquid asset can be converted quickly to cash with little sacrifice in its value. Which of the following asset dasses is generally considered to be the Ichst liquid? O plant and equipment Accounts recevable Inventories The most recent data from the annual balance sheets of Free Spirit Industries Corporation and LeBron Sports Equipment Corporation are as follows: LeBron Sports Equipment Corporation Balance Sheet December 31" (Millions of dollars) Free Spirit LeBron Sports Industries Equipment Corporation Corporation Free Spirit Industries Corporation Labilities 547 437 stock Retained earnings Total common equity Total liabilities and equity $1,563 $1,250 Total assets $6,250 $5,000 $5,000 $6,250 Free Spirit Industries Corporation's current ratio is ratio is and its quick ratio is and its quick ratio is Lebron Sports Equipment Corporation's current Note: Round your values to four decimal places Which of the following statements are true? Check all that apply. Free Spirit Industries Corporation has less liquidity but also a greater reliance on outside cash flow to finance its short-term obligations than LeBron Sports Equipment Corporation A current ratio of 1 indicates that the book value of the company's current assets is equal to the book value of its current liabilities 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. Free Spirit Industries Corporation has a better ability to meet its short-term fiabilities than LeBron Sports Equipment Corporation, An increase in the current ratio over time always means that the company's liquidity position is improving