Key comparative figures ($ millions) for both Best Buy and Circuit City follow.

Required
1. Compute the acid-test ratio for the two years shown for both companies.
2. Drawing on results from part 1, which company is better able to pay its current liabilities?
3. Did the acid-test ratio improve or decline for each of these companies?

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Best Buy Circuit City Key Figures Current Year Prior Year Current Year Prior Year Quick assets $4,238 $3.723 $1,056 $1,178 Current liabilities 6,056 4,959 1,622 1,263