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? O Inventories Accounts receivable Plant and equipment The most recent data from the annual balance sheets of Free Spirit Industries Corporation and LeBron Sports Equipment Corporation are as follows: Balance Sheet December 31St (Millions of dollars) Free Spirit Free Spirit LeBron Sports LeBron Sports Equipment Industries Equipment Industries Corporation Corporation Corporation Corporation Assets Liabilities Current Current liabilities assets $922 $0 $0 Cash $1,435 Accounts payable 338 Accruals Accounts 525 316 0 receivable Notes Inventories 1,540 990 1,793 1,687 payable $3,500 $1,687 Total $2,250 Total $2,109 current current liabilities assets Net fixed Long-term 2,578 2,063 bonds assets Net plant Total debt $3,750 2,750 2,750 $4,687 and equipment Common equity $1,016 $813 Common stock Retained 547 437 earnings $1,563 Total $1,250 common equity Total $6,250 $5,000 Total $6,250 $5,000 liabilities assets and equity Free Spirit Industries Corporation's current ratio is 1.3337 , and its quick ratio is 0.7469 ; LeBron Sports Equipment . Note: Round your values to four decimal places. , and its quick ratio is O.9294 Corporation's current ratio is 1.6596 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 liabilities than LeBron Sports Equipment Corporation An increase in the current ratio over time always means that the company's liquidity position is improving