Current assets exceed its long-term liabilities

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Reference no: EM13942033

Company A has a working capital ratio of 3 to 1 and Company B 0.9 to 1. Of the following choices, which ones are true and which ones are false? Explain.

a) Company A's ratio suggests it may not be able to fulfill its obligations when due

b) Company B's ratio indicates that its current assets exceed its long-term liabilities

c) Restructuring Company B's revolving line of credit (due upon bank's demand) to a long-term loan will improve its working capital ratio.

Reference no: EM13942033

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