Question

Problem 2: Based on the amounts shown in Figure 2, calculate the current ratio for each of the following companies (round the ratio to two decimals). The companies listed below represent competitors in the same industry. Identify the company with the strongest liquidity position. Figure 2. Current Assets and Current Liabilities Account Title Current Assets Edison MAXT $79,040 104,880 45,080 85,680 Current Liabilities $32,000 76,000 49,000 Chatter TRU 81,600 100,000 Gleeson 61,000

Answer 1

Current Ratio = Current Assets / Current Liabilities
	Current Assets	Current Liabilities	Current Ratio
Edison	$             79,040	$                    32,000	2.47
MAXT	$          1,04,880	$                    76,000	1.38
Chatter	$             45,080	$                    49,000	0.92
TRU	$             85,680	$                    81,600	1.05
Gleeson	$             61,000	$                1,00,000	0.61
The company with strongest liquidity = Edison