Unformatted text preview: .91 to 1 a ($930 X .70) Ã· $570 b ($1,500 X .60) Ã· $518 Lautrec Co. appears to be a better short-term credit risk than Toulouse Co. Analysis of various liquidity ratios demonstrates that Lautrec Co. is stronger financially, all other factors being equal, in the short-term. Comparative risk could be judged better if additional inform-ation were available relating to such items as net income, purpose of the loan, due date of current and long-term liabilities, future pro-spects, etc....
View Full Document
- Spring '10
- Balance Sheet, Generally Accepted Accounting Principles, Current asset, Toulouse Co, Lautrec Co.