urrent Assets

Lincoln Company Jefferson Corporation

Cash	$ 90,500		$ 45,500
Temporary investments	75,000		25,000
Accounts receivable (net)	115,000		90,000
Inventories	264,000		380,000
Prepaid expenses	5,500		9,500
Total current assets	$550,000		$550,000
Total current assets	$550,000		$550,000
Less current liabilities	210,000		210,000
Working capital	$340,000		$340,000
Current ratio ($550,000/$210,000)	2.6		2.6

Both companies show the current ratio of 2.6, but which company is more liquid and why? Does it mean that financial ratios analysis has lost its creditability?