Adkins Company Has a Current Ratio of 1

question 66

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) Adkins Company appears to be in better financial shape than Wilson Company.
• C) The two companies' debt ratios and current ratios vary in different directions, and these results do not make sense.
• D) Wilson Company appears to be in better financial shape than Adkins Company.

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Definitions:

Conscientiousness

A personality trait characterized by thoroughness, diligence, and the organization of one's actions.

Empirically Derived

Derived from or guided by experience or experimentation rather than theory or pure logic.

Discriminate

To make a distinction or differentiate, often unfairly, between individuals or groups based on characteristics such as race, gender, or age.

Personality Disorders

A category of psychological disorders distinguished by persistent unadaptive behavior, thought processes, and feelings that are expressed in various situations and differ significantly from what is considered normal within the person's cultural background.