) Liquidity analysis.b) Solvency analysis.c) Any other financial analysis that you think can help in making your decision. You are working as a project manager of a construction company. Due to theeconomic impact, your company is currently limited in term of resources,including financial resources. Due to this, the company can only run one projectat one time. Your company was offered two construction works by two differentdevelopers, which are Company A and Company B. Due to the limitedresources of the company, and to ensure that the project can run smoothlywithout any liquidity problem, it is vital that the client is stable and able to payon time. As the project manager, your company have instructed you to studythe current financial situation of Company A and Company B. Upon research,you have obtained the balance sheet of the companies as follows.Table 1: Balance Sheet for Company A and Company BAssetsAFixed AssetsOther Non-Current AssetsAccount ReceivablesInventoryCashТОTAL250,00080,000120,00080,000120,000650,000280,000110,000140,000100,000100,000730,000LiabilitiesСapitalLong Term DebtAccount PayablesOther Current LiabilitiesТОTAL250,000120,000160,000120,000650,000280,000140,000180,000130,000730,000Upon further investigation, you have found that the amount of account payablesfor Companies A and X at the start of the year is RM20,000 and RM30,000,respectively. Apart from that, the amount of credit purchase for Companies Aand B is RM250,000 and RM280,000, respectively. Based on all thisinformation, recommend on which company that give lower risk to yourcompany. The recommendation must be justified by the following analysis:

The construction company having limited economic resources can undertake only one construction…

Answered: Liquidity analysis. b) Solvency…

Liquidity analysis. b) Solvency analysis. c) Any other financial analysis that you think can help in making your decision.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter12: Capital Budgeting: Decision Criteria

Section: Chapter Questions

Problem 20P: The Aubey Coffee Company is evaluating the within-plant distribution system for its new roasting,...

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