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 Company A Company B Sector Average ASSETS Current assets Cash and cash equivalents 5 Marketable securities 5 Accounts receivable, net 5 Inventories 15 Prepaid expenses 50322 15 15 ~2201 7 16 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 10 Short-term debt 25 10 15 Accrued expenses 3 Total current liabilities 35 28 Long-term debt 28 Other non-current liabilities 7 Total liabilities 80 63 Total shareholders' equity 20 37 Total liabilities and shareholders' equity 100 ||| 100 100