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Assignment 04 - Analysis of Financial Statements The most recent data from the annual balance sheets of Fitcom Corporation and Scramouche Opera Company are as
Assignment 04 - Analysis of Financial Statements The most recent data from the annual balance sheets of Fitcom Corporation and Scramouche Opera Company are as follows: Balance Sheet December 31st (Millions of dollars) Fitcom Corporation Scramouche Opera Company Scramouche Opera Company Fitcom Corporation $0 Assets Current assets Cash Accounts receivable Inventories Total current assets $3,731 1,365 4,004 9,100 $2,398 878 2,574 5,850 Liabilities Current liabilities Accounts payable Accruals Notes payable Total current liabilities $0 823 4,661 5,484 4,387 4,387 Net fixed assets Net plant and equipment 7,150 Long-term bonds Total debt 6,703 12,187 7,150 5,363 9,750 Common equity Common stock Retained earnings Total common equity Total liabilities and equity 2,641 1,422 4,063 16,250 2,113 1,137 3,250 13,000 Total assets 16,250 13,000 , and its current ratio is Fitcom Corporation's quick ratio is , and its current ratio is ; Scramouche Opera Company's quick ratio is Which of the following statements are true? Check all that apply. Fitcom Corporation has less liquidity but also a greater reliance on outside cash flow to finance its short-term obligations than Scramouche Opera Company. 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 Fitcom Corporation has a better ability to meet its short-term liabilities than Scramouche Opera Company An increase in the current ratio over time always means that the company's liquidity position is improving
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