Question
Rory is performing an analysis of two similar companies. Company A and Company B, which both have current ratios of 3:1. However, Company B's quick
Rory is performing an analysis of two similar companies. Company A and Company B, which both have current ratios of 3:1. However, Company B's quick ratio is 1.85, whereas Company A's quick ratio is 2.25. Company A also has a lower debt-to-equity ratio than Company B. Which company will be in a better position to repay its debts as they come due?a)Company B, due to its lower quick ratio. b)Company A, due to its higher quick ratio. c)They are both equally capable of repaying their debts since they have identical current ratios. d)Company B, due to its higher debt-to-equity ratio.
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