Balance Sheet December 31st (Millions of Dollars)
	Scramouche Opera Company	Free Spirit Industries Inc.		Scramouche Opera Company	Free Spirit Industries Inc.
Assets			Liabilities
Current Assets			Current liabilities
Cash	$287	$184	Accounts payable	$0	$0
Accounts Receivable	105	68	Accruals	63	0
Inventories	308	198	Notes Payable	359	337
Total Current Assets	700	450	Total current liabilities	422	337
Net Fixes Assets			Long-term bonds	515	413
Net Plant and Equipment	550	550	Total debt	937	750
			Common equity
			Common stock	203	163
			Retained earnings	110	87
			Total common equity	313	250
Total Assets	1,250	1,000	Total liabilities and equity	1,250	1,000

Free Spirit Industries Inc.s quick ratio is (0.93, 1.13, 0.75, 0.90), and its current ratio is (1.34, 2.83, 1.84, 2.54); Scramouche Opera Companys quick ratio is (1.40, 1.12, 0.75, 0.93), and its current ratio is (1.66, 3.16, 2.86, 2.16).

Which of the following statements are true? Pick 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 Scramouche Opera Company.

- If a companys current liabilities are increasing faster than its current assets, the companys liquidity position is weakening.

- An increase in the quick ratio over time usually means that the companys liquidity position is improving and that the company is managing its short-term assets well.

- Free Spirit Industries Inc. has a better ability to meet its short-term liabilities than Scamouche Opera Company.

- An increase in the current ratio over time always means that the companys liquidity position is improving.