Comparative Report
Mesa has a greater amount of working capital. But that by itself does not indicate whether Mesa is more capable of meeting its current obligations. Further support is provided by the current ratios and acid-test ratios that show Mesa is in a more liquid position than Huff. However, this evidence does not mean that Huff's liquidity is inadequate. Such a conclusion would require more information such as norms for the industry or its other competitors. Notably, Huff's acid-test ratios approximate the traditional rule of thumb (1 to 1).