The Data of Franklin Brothers Corp

question 127

Multiple Choice

The data of Franklin Brothers Corp.for two years are given below. Based on the above information,which of the following statements is true?

• A)Cash ratio has increased from 0.02 in 2014 to 0.03 in 2015.
• B)Cash ratio has increased from 0.05 in 2014 to 0.08 in 2015.
• C)Cash ratio has increased from 0.417 in 2014 to 0.225 in 2015.
• D)Cash ratio has increased from 0.225 in 2014 to 0.417 in 2015.

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Definitions:

Unsecured Creditors

Creditors who have extended credit without securing collateral, putting them at greater risk of loss if the debtor defaults.

Total Assets

The sum of all resources owned by an entity, including both tangible and intangible items, that have value and can be used to meet liabilities.

Liabilities With Priority

Obligations that have a preferential claim on the assets of a company in case of liquidation over other forms of debt.