The most recent data from the annual balance sheets of Free Spirit Industries Corporation and LeBron Sports Equipment Corporation are as follows:

Balance Sheet December 31st (Millions of dollars)

	LeBron Sports Equipment Corporation	Free Spirit Industries Corporation		LeBron Sports Equipment Corporation	Free Spirit Industries Corporation
Assets			Liabilities
Current assets			Current liabilities
Cash	$861	$553	Accounts payable	$0	$0
Accounts receivable	315	203	Accruals	190	0
Inventories	924	594	Notes payable	1,075	1,012
Total current assets	$2,100	$1,350	Total current liabilities	$1,265	$1,012
Net fixed assets			Long-term bonds	1,547	1,238
Net plant and equipment	1,650	1,650	Total debt	$2,812	$2,250
			Common equity
			Common stock	$610	$488
			Retained earnings	328	262
			Total common equity	$938	$750
Total assets	$3,750	$3,000	Total liabilities and equity	$3,750	$3,000

Free Spirit Industries Corporations quick ratio is , and its current ratio is ; LeBron Sports Equipment Corporations quick ratio is , and its current ratio is .

Which of the following statements are true? Check all that apply.

Free Spirit Industries Corporation has less liquidity but also a greater reliance on outside cash flow to finance its short-term obligations than LeBron Sports Equipment Corporation.

A current ratio of 1 indicates that the book value of the companys current assets is equal to the book value of its current liabilities.

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 Corporation has a better ability to meet its short-term liabilities than LeBron Sports Equipment Corporation.

An increase in the current ratio over time always means that the companys liquidity position is improving.