Attention: Due to a bug in Google Chrome, this page may not function correctly. Click here to learn more 2. Liquidity ratios Aa Aa 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? Cash Accounts receivable Inventories The most recent data from the annual balance sheets of Pellegrini Southern Corporation and LeBron Sports Equipment Corporation are as follows: Balance Sheet December 31 (Millions of dollars) Pellegrini Southern Corporation LeBron Sports Equipment Corporation LeBron Sports Equipment Corporation Pellegrini Southern Corporation $0 Assets Current assets Cash Accounts receivable Inventories Total current assets Net fixed assets Net plant and equipment $2,583 945 2,772 6,300 $1,660 608 1,782 4,050 Liabilities Current liabilities Accounts payable Accruals Notes payable Total current liabilities 570 3,227 3,797 3,037 3,037 3,713 6,750 4,950 4,950 4,640 8,437 Long-term bonds Total debt Common equity Common stock Retained earnings Total common equity Total liabilities and equity 1,828 985 2,813 11950 1,463 787 2,250 9,000 Total assets 11,250 9,000 4: Assignment - Analysis of Financial Statements e most recent data from the annual balance sheets of Pellegrini Southern Corporation and LeBron Sports Equipment Corporation are follows: Balance Sheet December 31st (Millions of dollars) Pellegrini Southern Corporation LeBron Sports Equipment Corporation LeBron Sports Equipment Corporation Pellegrini Southern Corporation Liabilities Assets Current assets Cash Accounts receivable Inventories Total current assets Net fixed assets Net plant and equipment $2,583 945 2,772 6,300 $1,660 608 1,782 4,050 570 3,227 3,797 3,037 Current liabilities Accounts payable Accruals Notes payable Total current liabilities Long-term bonds Total debt Common equity Common stock Retained earnings Total common equity Total liabilities and equity 4,640 8,437 3,037 3,713 6,750 4,950 4,950 1,463 787 1,828 985 2,813 11,250 2,250 9,000 Total assets 11,250 9,000 Pellegrini Southern Corporation's current ratio is current ratio is and its quick ratio is and its quick ratio is ; LeBron Sports Equipment Corporation's . Note: Round your values to four decimal places. Which of the following statements are true? Check all that apply. Pellegrini Southern Corporation has less liquidity but also a greater reliance on outside cash flow to finance its short-term obligations than LeBron Sports Equipment Corporation. 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. Pellegrini Southern 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
