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Company a Has Current Assets of $42 Billion and Current

Question 44

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

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