A community for students.
Here's the question you clicked on:
 0 viewing
anonymous
 4 years ago
Company A has current assets of $42 billion and current liabilities of $31 billion.
Company B has current assets of $2.7 billion and current liabilities of $1.8 billion.
Which of the following statements is correct, based on this information? (Points : 1)
Company A is less likely than Company B to have sufficient working capital to meet its shortterm needs.
Company A has greater leverage than Company B.
Company A has less leverage than Company B.
Company A and Company B have roughly equivalent enterprise values
anonymous
 4 years ago
Company A has current assets of $42 billion and current liabilities of $31 billion. Company B has current assets of $2.7 billion and current liabilities of $1.8 billion. Which of the following statements is correct, based on this information? (Points : 1) Company A is less likely than Company B to have sufficient working capital to meet its shortterm needs. Company A has greater leverage than Company B. Company A has less leverage than Company B. Company A and Company B have roughly equivalent enterprise values

This Question is Open

anonymous
 4 years ago
Best ResponseYou've already chosen the best response.0I would go with option 2 This is because, company A has more current assets than current liabilities, and so it would have sufficient working capital to meet its shortterm needs. It's borrowing more than company B, so therefore has more leverage. And company A seems to be earning more than Comany B, but you can't tell by just current assets and liablities alone.
Ask your own question
Sign UpFind more explanations on OpenStudy
Your question is ready. Sign up for free to start getting answers.
spraguer
(Moderator)
5
→ View Detailed Profile
is replying to Can someone tell me what button the professor is hitting...
23
 Teamwork 19 Teammate
 Problem Solving 19 Hero
 Engagement 19 Mad Hatter
 You have blocked this person.
 ✔ You're a fan Checking fan status...
Thanks for being so helpful in mathematics. If you are getting quality help, make sure you spread the word about OpenStudy.