Answer:
Moon Corporation (I will provide the complete financial information of the two companies in the attachments below.)
Explanation:
A good way to determine a company's credit eligibility is to find its current ratio.
The current ratio is equal to the sum of current assets divided by the sum of current liabilities, and measures a firm's ability to pay its obligations.
According to the information in the attachments, Moon Corporation's Current Assets are $44,000 ($18,000 worth of cash + $26,000 of accounts receivable), and its current liabilities are $22,000 (the sum of notes payable $12,400, and accounts payable $9,600)
The current ratio of Moon Corporation is = $44,000 / $22,000
= 2
Star Corporation's current assets are $14,400, and current liabilities are $65,600.
The current ratio of Star Corporation is = $14,400 / $65,600
= 0.21
A much lower number. Thus, Moon Corporation, according to current ratios, is a far more favorable prospect for a loan.
