Question: Use the Alpha Co. and Beta Co ratios given below to answer Q2a & Q2b. The companies compete in same market. As at Dec 31,

Use the Alpha Co. and Beta Co ratios given below to answer Q2a & Q2b. The companies compete in same market.

As at Dec 31, 2019 Alpha Co. Beta Co. Current Ratio 2.6 2.5 Acid Test 1.2 1.1 A/R Turnover 22.2 26.8 Inventory Turnover 9.24 15.3

Q2a. Evaluate the performance the two companies. [1 mark]

Q2b. State which company is likely to be the better credit risk and explain why. [1 mark]

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