Question #4. Credit Exhibit 1, Balance Sheet Company A Company B Sector Average ASSETS Current assets Cash and cash equivalents 5 Marketable securities Accounts receivable, net 5 Inventories 15 Prepaid expenses 5 Total current assets 35 Property, plant, and equipment, net 40 Goodwill 25 Other assets 0 Total assets 100 5 0 15 20 15 55 7- 2 12 16 11e 48 37 8 35 0 10 100 7 100 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable 10 10 Short-term debt 25 10 Accrued expenses 0 5 Total current liabilities 35 25 10- 15 3e 284 28 LIABILITIES AND SHAREHOLDERS' EQUITY Long-term debt 45 20 Other non-current liabilities 0 10 Total liabilities 80 55 Total shareholders' equity 20 Total liabilities and shareholders' equity 100 100 7 63 37 45 100 Question 4-A Based on Exhibit 1, which statement is most likely correct?" A Company A has below-average liquidity risk. B Company B has above-average solvency risk. c Company A has made one or more acquisitions. 1 Question 4-B The quick ratio for Company A is closest to: A 0.43. B 0.57. C 1.00,- Question 4-C Based on Exhibit 1, the financial leverage ratio for Company B is closest to: A 0.55.- B 1.22. C 2.22. Question 4-D Based on Exhibit 1, which ratio indicates lower liquidity risk for Company A- compared with Company B? A Cash ratio B Quick ratio C Current ratio