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Compute the current ratio for each company and which

Business Applications Case Using the current ratio

The following information was drawn from the balance sheets of the Alberta and Ottawa Companies.

	Alberta Company	Ottawa Company
Current assets	$45,000	$72,000
Current liabilities	28,000	54,000

Required

a. Compute the current ratio for each company.

b. Which company has the greater likelihood of being able to pay its bills?

c. Assuming that both companies have the same amount of total assets, which company would produce the higher return on assets ratio?

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Cost Accounting: Compute the current ratio for each company and which

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