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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 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) hiquidity 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 A Fixed Assets Other Non-Current Assets Account Receivables Inventory Cash 250,000 80,000 120,000 80,000 120,000 650,000 280,000 110,000 140,000 100,000 100,000 730,000 ТОTAL Liabilities Capital Long Term Debt Account Payables Other Current Liabilities ТОTAL 250,000 120,000 160,000 120,000 650,000 280,000 140,000 180,000 130,000 730,000

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 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) hiquidity 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 A Fixed Assets Other Non-Current Assets Account Receivables Inventory Cash 250,000 80,000 120,000 80,000 120,000 650,000 280,000 110,000 140,000 100,000 100,000 730,000 ТОTAL Liabilities Capital Long Term Debt Account Payables Other Current Liabilities ТОTAL 250,000 120,000 160,000 120,000 650,000 280,000 140,000 180,000 130,000 730,000

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter3: Evaluation Of Financial Performance
Section: Chapter Questions
Problem 10P
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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 cre dit purchase for Companies A and B is 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 Fixed Assets Other Non-Current Assets Account Receivables Inventory Cash ТОTAL 250,000 80,000 120,000 80,000 120,000 650,000 280,000 110,000 140,000 100,000 100,000 730,000 Liabilities Саpital Long Term Debt Account Payables Other Current Liabilities 250,000 120,000 160,000 120,000 650,000 280,000 140,000 180,000 130,000 730,000 ТОTAL
Transcribed Image Text: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 cre dit purchase for Companies A and B is 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 Fixed Assets Other Non-Current Assets Account Receivables Inventory Cash ТОTAL 250,000 80,000 120,000 80,000 120,000 650,000 280,000 110,000 140,000 100,000 100,000 730,000 Liabilities Саpital Long Term Debt Account Payables Other Current Liabilities 250,000 120,000 160,000 120,000 650,000 280,000 140,000 180,000 130,000 730,000 ТОTAL
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