Question
The following information was drawn from the balance sheets of the Kansas and Montana companies: Kansas Montana Current assets $ 50,000 $ 55,000 Current liabilities
The following information was drawn from the balance sheets of the Kansas and Montana companies:
| Kansas | Montana | ||||||
| Current assets | $ | 50,000 | $ | 55,000 | |||
| Current liabilities | 25,000 | 22,000 | |||||
Required a. Compute the current ratio for each company. b. Which company has the greater likelihood of being able to pay its bills? c. 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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Financial Accounting For Undergraduates
Authors: Wallace
4th Edition
9781618533081
