Company a Has Current Assets of $42 Billion and Current

question 102

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

---

Definitions:

Kidneys

Pair of organs located in the abdomen of vertebrates, primarily involved in filtering waste products from the blood and excreting them in urine.

Conserve Water

The process of saving water to minimize usage and maintain its availability.

Reabsorbed

The process by which substances are taken back into the body tissues, particularly during the filtration process in the kidneys.

Water

A transparent, odorless, tasteless liquid compound of hydrogen and oxygen, vital for all known forms of life and used in many industrial processes.