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 Sector Average Company A Company B 5 ASSETS Current assets Cash and cash equivalents Marketable securities Accounts receivable, net Inventories Prepaid expenses 5 0 luuuuu | 5 15 15 20 15 7 2 12 16 11 | 35 Total current assets Property, plant, and equipment, net Goodwill 380 55 35 48 37 40 25 0 8 Other assets 10 7 0 100 Total assets 100 100 10 10 10 25 10 15 0 3 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable Short-term debt Accrued expenses Total current liabilities Long-term debt Other non-current liabilities Total liabilities Total shareholders' equity Total liabilities and shareholders' equity 25 28 lalo slo ti slobo 35 45 23 18 28 lale la s Club 20 10 0 80 63 20 100 55 45 100 37 100