2. Liquidity ratios Aa Aa E 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 Accounts receivable O Plant and equipment Inventories The most recent data from the annual balance sheets of N&B Equipment Company and LeBron Sports Equipment Inc. are as follows: Balance Sheet December 31st (Millions of dollars) N&B Equipment Company LeBron Sports Equipment Inc. Lebron Sports Equipment Inc. N&B Equipment Company Liabilities Current liabilities Accounts payable $0 Assets Current assets Cash Accounts receivable Inventories Total current assets $5,740 2,100 6,160 14,000 $3,690 1,350 3,960 9,000 Accruals Notes payable Total current liabilities 1,266 7,171 8,437 6,750 6,750 8,250 15,000 Net fixed assets Net plant and equipment Long-term bonds Total debt 10,313 18,750 11,000 11,000 Common equity Common stock Retained earnings Total common equity Total liabilities and equity 4,063 2,187 6,250 25,000 3,250 1,750 5,000 20,000 Total assets 25,000 20,000 , and its current ratio is ; LeBron Sports Equipment Inc.'s quick ratio is N&B Equipment Company's quick ratio is , and its current ratio is Which of the following statements are true? Check all that apply. O LeBron Sports Equipment Inc. has a better ability to meet its short-term liabilities than N&B Equipment Company. If a company's current liabilities are increasing faster than its current assets, the company's liquidity position is weakening. An increase in the quick ratio over time usually means that the company's liquidity position is improving and that the company is managing its short-term assets well. Compared to N&B Equipment Company, LeBron Sports Equipment 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. O O