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3 (14 Marks) LO2 The following accounting information relates to Company A and Company B, competing in the same industry: Company A (BD'000) Cash 800

3 (14 Marks) LO2 The following accounting information relates to Company A and Company B, competing in the same industry: Company A (BD'000) Cash 800 Company B (BD'000) 3,200 Short-term investments 0 1,100 Accounts receivable 0 800. Inventory 3,200 200 Accounts payable 1,200 1,180 Salaries payable 1,000 1,000 Required: A. Compute the current ratio and the quick ratio for the preceding separate companies. (Note: Round to one decimal, when needed) (10 marks) B. Which company is in the best position to meet short-term obligations? Explain. (4 marks)

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