Safeco’s current assets total $30 million, versus $15 million of current liabilities, while Risco’s current assets are $20 million, versus $40 million of current liabilities. Both firms would like to “window dress” their end-of-year financial statements, and to do so they tentatively plan to borrow $20 million on a short-term basis and to then hold the borrowed funds in their cash accounts. Which statement below best describes the results of these transactions?
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The transactions would increase both firms’ financial strength as measured by their current ratios.
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The transactions would decrease both firms’ financial strength as measured by their current ratios.
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The transactions would increase Safeco’s financial strength as measured by its current ratio but decrease Risco’s current ratio.
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The transactions would decrease Safeco’s financial strength as measured by its current ratio but increase Risco’s current ratio.
Primary production increases with an increase in total phosphorus concentration.
Baby Gorilla versus Baby Human
Slices of an Orange versus Orange Slices
Plant Breeding versus Genetic Engineering
Student Test Scores versus GDP per Capita
Percent of oxygen in the atmosphere versus altitude.