QUESTION 1: Using the information below: comment on the financial strength/weakness of Company A and B. Utilize ratios to back up your response. (10 marks) EXHIBIT 1 Common-Size Balance Sheets for Company A, Company B, and Sector Average ASSETS Current assets Cash and cash equivalents Marketable securities Accounts receivable, net Inventories Prepaid expenses Sector Company A Company B Average nnnny 5 7 5 0 2 5 15 12 15 20 16 15 11 Total current assets 35 55 48 Property, plant, and equipment, net 40 35 37 Goodwill 25 0 8 Other assets 0 10 Total assets 100 100 100 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable 10 10 Short-term debt 25 10 Accrued expenses 0 Total current liabilities 35 25 Long-term debt 45 Other non-current liabilities Total liabilities 80 55 Total shareholders' equity 20 45 Total liabilities and shareholders' equity 100 8|| 100 03227328||| 10 15 100