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FINANCIAL ACCOUNTING

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Evaluating Firm Liquidity
The following financial information is taken from the balance sheets of the Peter Company and the Paul Company:
Paul
Peter
Current assets
$200,000 $50,000
Current liabilities
40,000
20,000
Calculate the current ratio for each company.
Round answers to two decimal places, when appropriate.
Peter Company
Paul Company|
Which firm has a higher level of liquidity?

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