Company A has total assets of $125,000 and current assets of $25,000. Their cash and receivables were $15,000 in sum and they had no marketable securities. Company A has current liabilities of $15,000.
Company B has total assets of $115,000 and current assets of $35,000. Their cash, marketable securities, and receivables were $20,000 in sum. Company B has current liabilities of $10,000.
Which of the following is true regarding the liquidity of these two companies?
A. Both the current and quick ratio indicate that Company B is the most liquid.
B. The current ratio, but not the quick ratio, indicates Company B is more liquid.
C. Both the current and quick ratio indicate that Company A is the most liquid.
D. The current ratio, but not the quick ratio, indicates Company A is more liquid.