Company a Has Current Assets of $42 Billion and Current

question 35

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.

---

Definitions:

Territory Manager

A person who plans, organizes, and executes activities that increase sales and profits in a given territory.

Breakfast Cereal

A food product designed to be eaten as a quick and easy breakfast option, typically manufactured from processed grains.

Company Funds

Monetary resources owned or held by a company, often used for operational costs, investments, expansion, and other financial activities within the business.

Considerable Traveling

Refers to the significant amount of travel, often required by certain professions, to meet clients, attend meetings, or supervise operations.