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Camaro GTO Torino Cash $ 2,400 $ 230 $ 1,300 Short-term investments 0 0 600 Current receivables 260 510 500 Inventory 2,175 2,020 3,050 Prepaid
| Camaro | GTO | Torino | |
|---|---|---|---|
| Cash | $ 2,400 | $ 230 | $ 1,300 |
| Short-term investments | 0 | 0 | 600 |
| Current receivables | 260 | 510 | 500 |
| Inventory | 2,175 | 2,020 | 3,050 |
| Prepaid expenses | 300 | 600 | 900 |
| Total current assets | $ 5,135 | $ 3,360 | $ 6,350 |
| Current liabilities | $ 2,220 | $ 1,320 | $ 3,550 |
a. Compute the acid-test ratio for each of the separate cases above. b. Which company is in the best position to meet short-term obligations?
| Acid-Test Ratio | ||||||
| Numerator: | Denominator: | = | Acid-Test Ratio | |||
| / | = | Acid-test ratio | ||||
| Camaro | / | = | to 1 | |||
| GTO | / | = | to 1 | |||
| Torino | / | = | to 1 | |||
Which company is in the best position to meet short-term obligations?
|
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