Lilly's Corporation Has Working Capital of $620,000,and Harmon Corporation Has

question 95

Multiple Choice

Lilly's Corporation has working capital of $620,000,and Harmon Corporation has working capital of $840,000.Which of the following statements is incorrect?

• A) Since working capital is an absolute amount,other factors such as size of the company and materiality will help to determine liquidity of these two companies.
• B) Since Harmon's working capital exceeds Lilly's working capital,it is safe to conclude that Harmon is more liquid than Lilly.
• C) If Lilly Corporation is smaller than Harmon or has lower current liabilities;Lilly could be more liquid than Harmon.
• D) None of these answers is correct.

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Definitions:

Between-group

Pertaining to comparisons or differences that are made between distinct groups in an experiment or study.

Error

Error, in a statistical context, signifies the difference between the observed value and the true value.

F-ratio Distribution

A probability distribution used in ANOVA tests, representing the ratio of two variances to assess the significance of group differences.

Positively Skewed

Describes a distribution with a tail that extends to the right, indicating a majority of the data points are situated on the left side of the distribution.