3 K21 1 2 12 v A B fx B C D E Shown below are liquidity ratios for several companies. Instructions: General G H 3 4 5 b) Which company has had difficulty obtaining products from its suppliers? Why? For each of the following questions, choose the appropriate company and explain why you chose that company by referring to the ratios. a) Which company sold common shares recently and has not yet invested all of the cash raised from the share issue? 6 c) Which company may have a credit policy that is too tight? Why? 7 d) Which company is managing its working capital most effectively? Why? 8 9 10 Current ratio. 12 Days in inventory 13 Company #1 Company #2 Company #3 Company #4 Industry Average 1.5:1 1.6:1 11 Average collection period 29 days 57 days 1.3:1 39 days 2.9:1 52 days 1.2:1 45 days 71 days 20 days 50 days 65 days 60 days 14 Ai 15 ME 16 88 17 18 19 20 21 " = Q1 Q2 Q3 Ratios