Upon further investigation, you have foundthat the amount of account payables forCompanies A and X at the start of thelyear is 20,000 and 30,000, respectively.Apart from that, the amount of creditpurchase for Companies A and B is250,000 and 280,000, respectively.Based on all this information, recommendon which company that gire lower risk toyour company. The recommendation must beustified by the following analysis:a) hiquidity analysis.b) Solvency analysis.c) Any other financial analysis that youthink can help in making your decision.Table: Balance Sheet for Company A and Company BAssetsFixed AssetsOther Non-Current AssetsAccount ReceivablesInventoryCash250,00080,000120,00080,000120,000650,000280,000110,000140,000100,000100,000ТОTAL730,000LiabilitiesСаpitalLong Term DebtAccount PayablesOther Current LiabilitiesТОTAL250,000120,000160,000120,000650,000280,000140,000180,000130,000730,000

Ratio Analysis: Under Ratio analysis, various items of financial information in the financial…

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: ad Liquidity analysis. b) 5olvency 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 250,000 80,000 120,000 80,000 120,000 280,000 110,000 140,000 100,000 100,000 730,000 Inventory Cash TОTAL 650,000 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: ad Liquidity analysis. b) 5olvency 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 250,000 80,000 120,000 80,000 120,000 280,000 110,000 140,000 100,000 100,000 730,000 Inventory Cash TОTAL 650,000 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

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 10P

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