The following data were taken from the records of Action Company and Brown Company: (Data are in thousands) Action Company Brown Company Current assets $15,000 $10,000 Current liabilities $14,500 $5,000 Working capital $500 $5,000 Current ratio 1.03 2.00 Based on this data, a supplier

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Business

Robinson

25 June, 23:07

The following data were taken from the records of Action Company and Brown Company: (Data are in thousands) Action Company Brown Company Current assets $15,000 $10,000 Current liabilities $14,500 $5,000 Working capital $500 $5,000 Current ratio 1.03 2.00 Based on this data, a supplier

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Levy · Answer 1

See explanation section

Explanation:

From the data table, it is understood that the Action company has a current ratio of 1.03. It means the company has slightly more current assets than current liabilities. On the other hand, Brown company has twice more current assets than its current liabilities. Therefore, a supplier wants to increase the credit supply to the Brown company.