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Questions 31 through 34 refer to Exhibit 1.
EXHIBIT 1 Common-Size Balance Sheets for Company A, Company B, and Sector Average
| | Company A | Company B | Sector Average |
| ASSETS |
| Current assets |
| Cash and cash equivalents | 5 | 5 | 7 |
| Marketable securities | 5 | 0 | 2 |
| Accounts receivable, net | 5 | 15 | 12 |
| Inventories | 15 | 20 | 16 |
| Prepaid expenses | 5 | 15 | 11 |
| Total current assets | 35 | 55 | 48 |
| Property, plant, and equipment, net | 40 | 35 | 37 |
| Goodwill | 25 | 0 | 8 |
| Other assets | 0 | 10 | 7 |
| Total assets | 100 | 100 | 100 |
| LIABILITIES AND SHAREHOLDERS EQUITY |
| Current liabilities |
| Accounts payable | 10 | 10 | 10 |
| Short-term debt | 25 | 10 | 15 |
| Accrued expenses | 0 | 5 | 3 |
| Total current liabilities | 35 | 25 | 28 |
| Long-term debt | 45 | 20 | 28 |
| Other non-current liabilities | 0 | 10 | 7 |
| Total liabilities | 80 | 55 | 63 |
| Total shareholders equity | 20 | 45 | 37 |
| Total liabilities and shareholders equity | 100 | 100 | 100 |
- The quick ratio for Company A is closest to:
- 0.43.
- 0.57.
- 1.00.
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