Evaluating Firm Liquidity The following financial information is taken from the balance sheets of the Drucker Company and the Ito Company: Drucker Ito Current assets $250,000 $50,000 Current liabilities $100,000 $15,000 Calculate the current ratio for each company. Note: Round answers to two decimal places. Current ratio Drucker Company Ito Company Which firm has the higher level of liquidity? Drucker Company Ito Company Check

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Evaluating Firm Liquidity
The following financial information is taken from the balance sheets of the Drucker Company and the Ito Company:
Drucker
Ito
Current assets
$250,000 $50,000
Current liabilities $100,000 $15,000
Calculate the current ratio for each company.
Note: Round answers to two decimal places.
Current ratio
Drucker Company
Ito Company
Which firm has the higher level of liquidity?
Drucker Company
Ito Company
Check
Transcribed Image Text:Evaluating Firm Liquidity The following financial information is taken from the balance sheets of the Drucker Company and the Ito Company: Drucker Ito Current assets $250,000 $50,000 Current liabilities $100,000 $15,000 Calculate the current ratio for each company. Note: Round answers to two decimal places. Current ratio Drucker Company Ito Company Which firm has the higher level of liquidity? Drucker Company Ito Company Check
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