Finance: Need an answer hurried!?
Company A have total current assets equal to $10,000 and working property of $5,000. Company B have one and the same amount of working means, but it have total current assets of $1,000,000. The company beside the better working wherewithal position is:
a)company A
b)company B
c)they both enjoy equally worthy working assets positions
d)cannot be determined near the information given
Answers:
Please look right through the entity above trying to trade you something.
The answer is a - Company A is in a better position.
You can numeral this out by calculating the current ratio which =
Current Assets/Current Liabilities. (Note - working wealth = current assets - current liabilities).
So the Current Ratio of A = 10,000/5,000 = 2.00
Current Ratio of B = 1,000,000/995,000 = 1.01
A is clearly within a better position
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What does this be a sign of?
a)company A
b)company B
c)they both enjoy equally worthy working assets positions
d)cannot be determined near the information given
Answers:
Please look right through the entity above trying to trade you something.
The answer is a - Company A is in a better position.
You can numeral this out by calculating the current ratio which =
Current Assets/Current Liabilities. (Note - working wealth = current assets - current liabilities).
So the Current Ratio of A = 10,000/5,000 = 2.00
Current Ratio of B = 1,000,000/995,000 = 1.01
A is clearly within a better position