Financial Statements Of Roberts Company And Blackburn Company

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Thanks for your letter providing the details about financial statements of Roberts Company and Blackburn Company. This letter is calculating four different financial ratios to analyze the financial health and profitability of two companies. The current ratio is to show a company has sufficient resources to pay back its current liabilities. Moreover, a business standard for the current ratio is at least 2. The current ratio of Roberts and Blackburn were 3.2 and 1.6 respectively. It means that former company is more capable to alleviate obligations. In addition, the quick ratio measures how well the current liabilities are covered by cash and quick sources of cash. A ratio under 1.0 indicates that the company would be unable to pay its liabilities