Company a Has Current Assets of $42 Billion and Current

Multiple Choice

Company A has current assets of $42 billion and current liabilities of $31 billion. Company B has current assets of $2.7 billion and current liabilities of $1.8 billion. Which of the following statements is correct, based on this information?

A) Company A and Company B have roughly equivalent enterprise values.
B) Company A has greater leverage than Company B.
C) Company A has less leverage than Company B.
D) Company A is less likely than Company B to have sufficient working capital to meet its short-term needs.