Balance Sheet December 31st31st (Millions of dollars)

	Zebra Paper Corporation	Fitcom Corporation		Zebra Paper Corporation	Fitcom Corporation
Assets			Liabilities
Current assets			Current liabilities
Cash	$2,870	$1,845	Accounts payable	$0	$0
Accounts receivable	1,050	675	Accruals	633	0
Inventories	3,080	1,980	Notes payable	3,586	3,375
Total current assets	$7,000	$4,500	Total current liabilities	$4,219	$3,375
Net fixed assets			Long-term bonds	5,156	4,125
Net plant and equipment	5,500	5,500	Total debt	$9,375	$7,500
			Common equity
			Common stock	$2,031	$1,625
			Retained earnings	1,094	875
			Total common equity	$3,125	$2,500
Total assets	$12,500	$10,000	Total liabilities and equity	$12,500	$10,000

Fitcom Corporations current ratio is , and its quick ratio is ; Zebra Paper Corporations current ratio is , and its quick ratio is . Note: Round your values to four decimal places.

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 Zebra Paper Corporation.

A current ratio of 1 indicates that the book value of the companys 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 Zebra Paper Corporation.

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