EXERCISE 1–10 Huff Company and Mesa Company are similar firms that operate in the same industry. The following information is available:

HUFF MESA 2006 2005 2004 2006 2005 2004 Current ratio . . . . . . . . . . . . . . . . . 1.6 1.7 2.0 3.1 2.6 1.8 Acid-test ratio . . . . . . . . . . . . . . . 0.9 1.0 1.1 2.7 2.4 1.5 Accounts receivable turnover . . . . 29.5 24.2 28.2 15.4 14.2 15.0 Inventory turnover . . . . . . . . . . . . . 23.2 20.9 16.1 13.5 12.0 11.6 Working capital . . . . . . . . . . . . . . $60,000 $48,000 $42,000 $121,000 $93,000 $68,000 Write a one-half page report comparing Huff and Mesa using the available information. Your discussion should include their ability to meet current obligations and to use current assets efficiently.