Q 1. Suppose that you have 1.5 million rupees to invest in the stock market. Given that people will always have to eat, you have decided to look for investment opportunities in Pakistan Petroleum Ltd. (PPL) and Attock Refinery Ltd. (ATORL). Your analysis of cach company's financial statements reveals that both have negative working capital, and both have current ratio of less than I to 1. Based on your findings, should you be concerned about the short-term liquidity of these two companies? Explain.
Q 1. Suppose that you have 1.5 million rupees to invest in the stock market. Given that people will always have to eat, you have decided to look for investment opportunities in Pakistan Petroleum Ltd. (PPL) and Attock Refinery Ltd. (ATORL). Your analysis of cach company's financial statements reveals that both have negative working capital, and both have current ratio of less than I to 1. Based on your findings, should you be concerned about the short-term liquidity of these two companies? Explain.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Q 1.
Suppose that you have 1.5 million rupees to invest in the stock market. Given that
people will always have to eat, you have decided to look for investment opportunities in
Pakistan Petroleum Ltd. (PPL) and Attock Refinery Ltd. (ATORL). Your analysis of
cach company's financial statements reveals that both have negative working capital,
and both have current ratio of less than I to 1. Based on your findings, should
you
be
concerned about the short-term liquidity of these two companies? Explain.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F40da375e-a8f0-4a7e-b71b-f9120fe17f68%2F3160185a-35ec-4a79-be7a-400ea6d3bea6%2Fz1gw6s_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Q 1.
Suppose that you have 1.5 million rupees to invest in the stock market. Given that
people will always have to eat, you have decided to look for investment opportunities in
Pakistan Petroleum Ltd. (PPL) and Attock Refinery Ltd. (ATORL). Your analysis of
cach company's financial statements reveals that both have negative working capital,
and both have current ratio of less than I to 1. Based on your findings, should
you
be
concerned about the short-term liquidity of these two companies? Explain.
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