quid wset can be converted to cash qudly without significanby imgacdting the ets

Question

quid wset can be converted to cash qudly without significanby imgacdting the ets wae hich of the following aset classes is generally considered to be the most liquid? O Inventories O Accounts recelvable O Cash he most reoent data from the annual bolance sheets of NeB equioment compeny and Letron Sports Equipment inc are s follows Balance Sheet December 31 cMilions of dollars) SportsEquipment EquipmentCompany EquipmentQuipment Equipment Company Inc. ourrent assets Current fablities 2,583 Accounts peyable $0 Cash Accountsrecevabe Inventories 4,018 1,470 45Accruals ,772otes paysble 6,300 Total current iablities 5,020 4,725 Total curront assets ot fixed assets Long term bonds 7.219 5.775 et plant ond equipment 7,700 7700Total debt Common equity 2,275 ,225 3,s00 common stock 2,844 Retain eeis 4,37 17 300 176500 ab Equipment Compeniscurrent rei LelBro Sports Equipment tncis curront rab andts cuinck ratio i which of the foilewing statements re true? KNop than tebron Sports zquireent nc HBQUIPTment compens

Explanation / Answer

Cash asset class is generally considered to be the most liquid. Current ratio Quick ratio N&B 6300/4725=1.3333 (6300-2772)/4725=0.7466 LeBron 9800/5906=1.6593 (9800-4312)/5906=0.9292 True statement are: 2 - A current ratio of 1 indicates that the book value of the company's current assets is equal to the book value of its current liabilities. 3 - If a company has a quick ratio of less------ to meet its short term obligations.

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