Problem:
Please show work so I can understand how you arrived at the conclusions.
Two companies, A and B, have the following balance sheet accounts:
A B
Current assets $ 150 $ 800
Fixed assets 300 2200
Current liabilities 75 600
Long-term debt 75 1000
Equity 300 1400
a. Compute values for all of the ratios that measure working capital for firms A and B.
b. Compare Firm A to B with regards to its need for working capital and how it finances its working capital (short-term vs. long-term financing).