Upon further investigation, you have 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 B is 250,000 and 280,000, respectively. Based on all this in formation, recommend on which company that gire lower risk to your company. The recommendation must be justified by the following analysis: alhiquidity analysis. b) Solvency analysis. c) Any other financial analysis that you think can help in making vDur decision.
Upon further investigation, you have 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 B is 250,000 and 280,000, respectively. Based on all this in formation, recommend on which company that gire lower risk to your company. The recommendation must be justified by the following analysis: alhiquidity analysis. b) Solvency analysis. c) Any other financial analysis that you think can help in making vDur decision.
Chapter3: Evaluation Of Financial Performance
Section: Chapter Questions
Problem 10P
Related questions
Question
![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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff6eb33f4-142b-486d-8f81-ce3df2c70098%2F67d310d7-5071-40bf-bced-65f5a52e69cb%2Fqrmi4i_processed.jpeg&w=3840&q=75)
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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