Question
Given the following information, which is true? Company 1 - Current Ratio: 2.3x, Times Interest Earned: 3.2x, Inventory Turnover: 6.0x Company 2 - Current Ratio:
Given the following information, which is true? Company 1 - Current Ratio: 2.3x, Times Interest Earned: 3.2x, Inventory Turnover: 6.0x
Company 2 - Current Ratio: 0.7x, Times Interest Earned: 1.4x, Inventory Turnover: 3.2x
Company 3 - Current Ratio: 1.3x, Times Interest Earned: 5.7x, Inventory Turnover: 3.4x
A) Company 2 has the highest probability of defaulting on its debt
B) Lenders would view Company 3 as higher risk of default than company 2
C) Company 1 is the least efficient at managing inventory
D) Company 2 is the most liquid firm
E) Company 3 is more liquid than Company 1
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