Balance Sheet For the Year Ending on December 31 (Millions of dollars) EII Virtual EII Virtual Assets Liabilities & Equity Current liabilities: Current assets: Cash 4,592 2,952 0 0 Accounts receivable 1,012.5 Inventories 1,680 4,928 11,200 1,080 3,168 7,200 Total current assets Accounts payable Accruals Notes payable Total current liabilities Long-term bonds Total debt Common equity 5,737.5 6,750 8,250 15,000 5,400 5,400 6,600 12,000 Net fixed assets: Net plant and equipment 8,800 8,800 Common stock 3,250 2,600 Retained earnings 1,750 5,000 1,400 4,000 Total common equity Total assets 20,000 16000 Total liabilities and equity 20,000 16000 Virtual's current ratio is and its quick ratio is , whereas EII's current ratio is y , and its quick ratio is v . Which of the following statements are true? Check all that apply. East India Inc. (EII) has a better ability to meet its short-term liabilities than Virtual Industriesnc. O 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. O An increase in the quick ratio over time usually means that the company's liquidity position is improving. O As compared to Virtual Industriesnc., East India Inc. (EII) has lesser liquidity and relatively greater reliance on outside cash flow to finance its short-term obligations. O An increase in the current ratio over time would always mean that the company's liquidity position is improving. One of the most important assumptions behind the calculation of quick ratio is that: O The firm's inventories are highly liquid and can be sold quickly with minimal loss of value to assist in the settlement of the firm's financial obligations O The firm's accounts receivables can be collected and converted into cash within the time period for which credit was granted O The firm's accounts receivables will be collected late (after the expiration of the credit period) or are uncollectible