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On December 31, 2021, Big River Company had $1 million of current assets and $900,000 of current liabilities. On the same day, Small Fry Company
On December 31, 2021, Big River Company had $1 million of current assets and $900,000 of current liabilities. On the same day, Small Fry Company had $200,000 of current assets and $100,000 of current liabilities. Calculate the working capital and current ratio for both companies and compare the results. Which liquidity measure is more relevant?
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