Determine each firms current ratio and quick ratio

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Reference no: EM13522192

Calculating Liquidity Ratios

The following schedule summarizes the composition of current assets and current liabilities reported in the year-end balance sheets from Triangle Air Lines and Nazareth Steel:


Triangle Air Lines

Nazareth Steel


(Dollars in millions)

Total current assets

$2,821,920

$1,591,100

Inventories included in



current assets

0

852,500

Prepayment and supplies



included in current assets

586,751

6,500

Total current liabilities

2,972,831

914,200

Required

a. Based on the information given here, determine each firm's current ratio and quick ratio at the end of the year.

b. Which firm do you consider to be in better financial condition? Explain.

Reference no: EM13522192

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