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    Compute values to arrive at working capital and compare ways to finance working capital

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    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).

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