Which of the following,if true,would strengthen the case that Streeter & Sons will be able to meet its current financial obligations?
A) The company has high levels of accounts payable.
B) The company's liabilities exceed its assets.
C) The company currently has a negative cash flow.
D) The company needs to expand its number of customers.
E) The company has more assets than it has liabilities.

Question

Quizplus · Accepted Answer

E)If Streeter & Sons has more assets than liabilities, this would be an indicator that it does not have too much debt and can therefore meet its financial obligations. If it has large current liabilities (Choice A), if its liabilities exceed its assets (Choice B), or if the company has a negative cash flow (Choice C), it's less likely it would be in a good position to meet its current obligations. Needing to expand its customer base (Choice D)would be an indication that Streeter & Sons is not generating enough revenue, and thus also would weaken the case that it is able to meet its financial obligations.

Which of the Following,if True,would Strengthen the Case That Streeter