2. Liquidity ratios Aa Aa Most firms borrow money to finance some of their assets, and most will choose to borrow some long-term funds and some short-term funds, which group of lenders would put greater emphasis on a firm's liquidity ratio when evaluating a potential borrower? Short-term lenders Long-term lenders The most recent data from the annual balance sheets of Free Spirit Industries Inc. and Jing Foodstuffs Inc. are as follows: Jing Foodstuffs Inc. Jing Foodstuffs Inc. Free Spirit Free Shirt Industries Inc. Assets Current assets Cash Accounts receivable Inventories Total current assets $4,879 1,785 5,236 11,900 Balance Sheet December 31st (Millions of dollars) Free Spirit Industries Inc. Liabilities Current liabilities $3,136 Accounts payable 1,148 Accruals 3,366 Notes payable 7,650 Total current liabilities Long-term bonds 9,350 Total debt Common equity Common stock Retained earnings Total common equity 17,000 Total liabilities and equity 5,737 1,076 6,096 7,172 8,765 15,937 Net fixed assets Net plant and equipment 5,737 7,013 12,750 9,350 2,763 1.487 3,453 1,860 5,313 21,250 4.250 Total assets 21,250 17,000 Free Spirit Industries Inc.'s current ratio is , and its quick ratio is and its quick ratio is ; Jing Foodstuffs Inc.'s current ratio is Note: Round your values to four decimal places. Which of the following statements are true? Check all that apply. Free Spirit Industries Inc. has less liquidity but also a greater reliance on outside cash flow to finance its short-term obligations than Jing Foodstuffs 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. Free Spirit Industries Inc. has a better ability to meet its short-term liabilities than Jing Foodstuffs Inc. An increase in the current ratio over time always means that the company's liquidity position is improving