on which company that gire lower risk to your company. The recommendation must be ustified by the following analysis: a) hiquidity analysis. b) Solvency analysis. c) Any other financial analysis that think can help in making your you. decision.

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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Upon further investigation, you hare found
that the amount of account payables for
Companies A and X at the start of the
year is 20,000 and 30,000, respectively.
Apart from that, the amount of credit
purchase for Companies A and Bis
250,000 and 280,000, respectively.
Based on all this information, recommend
on which company that gire lower risk to
your company. The recommendation must be
ustified by the following analysis:.
a) Liquidity analysis.
b) Solvency analysis.
c) Any other financial analysis that you.
think can help in making your decision.
Table: Balance Sheet for Company A and Company B
Assets
280,000
110,000
140,000
100,000
100,000
730,000
Fixed Assets
Other Non-Current Assets
250,000
80,000
120,000
80,000
120,000
650,000
Account Receivables
Inventory
Cash
ТОTAL
Liabilities
Capital
Long Term Debt
Account Payables
Other Current Liabilities
ТОTAL
250,000
120,000
160,000
120,000
650,000
280,000
140,000
180,000
130,000
730,00
Transcribed Image Text:Upon further investigation, you hare found that the amount of account payables for Companies A and X at the start of the year is 20,000 and 30,000, respectively. Apart from that, the amount of credit purchase for Companies A and Bis 250,000 and 280,000, respectively. Based on all this information, recommend on which company that gire lower risk to your company. The recommendation must be ustified by the following analysis:. a) Liquidity analysis. b) Solvency analysis. c) Any other financial analysis that you. think can help in making your decision. Table: Balance Sheet for Company A and Company B Assets 280,000 110,000 140,000 100,000 100,000 730,000 Fixed Assets Other Non-Current Assets 250,000 80,000 120,000 80,000 120,000 650,000 Account Receivables Inventory Cash ТОTAL Liabilities Capital Long Term Debt Account Payables Other Current Liabilities ТОTAL 250,000 120,000 160,000 120,000 650,000 280,000 140,000 180,000 130,000 730,00
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