Composition of current assets

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Composition of Current Assets

The following schedule summarizes the current assets reported in the year-end balance sheets of Costello Laboratories, a company that develops, manufactures, and markets health care products, and Triangle Air Lines, a major provider of passenger, freight, and mail air transportation:


Costello Laboratories

Triangle Air Lines


(Dollars in thousands)

Current Assets



Cash and equivalents

$ 300,676

$ 1,180,364

Investment securities

78,149

-

Accounts receivable,



net of allowance

1,336,222

1,024,869

Supplies

-

90,593

Inventories

940,533

-

Prepaids and other

929,955

526,094

Total current assets

3,585,535

2,821,920

Noncurrent, total

4,103,034

9,049,103

Total assets

$7,688,569

$11,871,023

Required

a. Identify the major differences between these two firms in the composition of current assets. Try to explain these differences in terms of the types of goods and services that each company produces.

b. Based solely on the information provided here, which company appears to be more liquid?

Reference no: EM13522197

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