Multiple Choice
Adkins Company has a current ratio of 1.0 and a debt ratio of 0.7.Wilson Company has a current ratio of 1.4 and a debt ratio of 0.5.Both companies are in the same industry.Which of the following statements is TRUE?
A) The two companies' debt ratios and current ratios vary in different directions,and the companies appear to be in similar financial shape.
B) The two companies' debt ratios and current ratios vary in different directions,and these results do not make sense.
C) Wilson Company appears to be in better financial shape than Adkins Company.
D) Adkins Company appears to be in better financial shape than Wilson Company.
Correct Answer:
Verified
Correct Answer:
Verified
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