Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I think most of my answers are correct but I mainly need help with the last portion A liquid asset can be converted quickly to

image text in transcribedI think most of my answers are correct but I mainly need help with the last portion

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? Money market instruments Real estate Treasury bills The most recent data from the annual balance sheets of Free Spirit Industries Inc. and Jing Foodstuffs Inc. are as follows: Free Spirit Industries Inc.'s quick ratio is 0.7468, and its current ratio is 1.3336; Jing Foodstuffs Inc.'s quick ratio is 0.9292, and its current ratio is 1.6592. Which of the following statements are true? Check 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 Jing Foodstuffs Inc.. If a company's current liabilities are increasing faster than its current assets, the company's liquidity position is weakening. 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. Free Spirit Industries Inc. has a better ability to meet its short-term liabilities than Jing Foodstuffs Inc. An increase in the current ratio over time always means that the company's liquidity position is improving

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Handbook Of Financial Communication And Investor Relations

Authors: Alexander V. Laskin

1st Edition

1119240786, 978-1119240785

More Books

Students also viewed these Finance questions

Question

List and describe the financial statements of a corporation.

Answered: 1 week ago