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Compute the current ratio for each company

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Reference no: EM133152194

Question - The following information was drawn from the balance sheets of the Kansas and Montana companies:

 

Kansas

Montana

Current assets

$52,000

$76,000

Current liabilities

35,500

38,000

Required -

a. Compute the current ratio for each company.

b. Which company has the greater likelihood of being able to pay its bills?

c. Assume that both companies have the same amount of total assets. Speculate as to which company would produce the higher return-on-assets ratio.

Reference no: EM133152194

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