Comment on the liquidity of the two companies

Reference no: EM131313230

Suppose you are comparing two companies that are in the same line of business.

Company C has an operating cycle of 40 days, and Company D has an operating cycle of 60 days.

Company C has a current ratio of 3, and Company D has a current ratio of 2.5.

Comment on the liquidity of the two companies. Which company has more risk of not satisfying its near-term obligations? Why?

Reference no: EM131313230

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