Lakeland Corporation has working capital of $440,000,and Houston Corporation has working capital of $320,000.Which of the following statements is incorrect?
A) Since working capital is an absolute amount,other factors such as size of the company and materiality will help to determine liquidity of these two companies.
B) Since Lakeland's working capital exceeds Houston's working capital,it is safe to conclude that Lakeland is more liquid than Houston.
C) If Houston Corporation is smaller than Lakeland or has lower current liabilities;Houston could be more liquid than Lakeland.
D) None of these answer choices are correct.
Correct Answer:
Verified
Q60: Which of the following statements is generally
Q62: Blumenthal Company declared and paid a cash
Q63: On January 1,2015,Gatewood collected $8,200 of accounts
Q64: On January 1,2015,Gatewood paid $200 for transportation
Q66: Horizontal analysis is also known as:
A)Liquidity analysis.
B)Absolute
Q67: Blumenthal Company received cash of $2,000,000 by
Q68: Cost of goods sold/average inventory is the
Q69: Which ratio would you use to examine
Q70: Which type of approach should be used
Q79: Short-term creditors are usually most interested in
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents