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The following information was drawn from the balance sheets of the Kansas and Montana companies. Kansas Montana Current assets $59,000 $78,000 Current liabilities 40,000 43,000
The following information was drawn from the balance sheets of the Kansas and Montana companies.
| Kansas | Montana | |
|---|---|---|
| Current assets | $59,000 | $78,000 |
| Current liabilities | 40,000 | 43,000 |
Required
- Compute the current ratio for each company.
- Which company has the greater likelihood of being able to pay its bills?
- Assume that both companies have the same amount of total assets. Speculate as to which company would produce the higher return-on-assets ratio.
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Corporate Assessment Auditing A Company Personality
Authors: Adrian Furnham, Barrie Gunter
1st Edition
1138887641, 978-1138887640
