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Compute the current ratio and acid-test ratio

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Question: Compute the current ratio and acid-test ratio for each of the following separate cases. (Round ratios to two decimals.) Which company case is in the best position to meet short-term obligations? Explain.

                                                       Case A         Case B          Case C

Cash . . . . . . . . . . . . . . . . . . . . . . . . ` $ 800         $ 510           $3,200

Short-term investments . . . . . . . .               0             0                1,100

Current receivables . . . . . . . . . . . .             0             790                800

Inventory . . . . . . . . . . . . . . . . . . . .     2,000          1,600              1,900

Prepaid expenses . . . . . . . . . . . . . .       1,200             600                 300

Total current assets . . . . . . . . . . . .     $4,000          $3,500            $7,300

Current liabilities . . . . . . . . . . . . . . $2,200                $1,100           $3,650

Reference no: EM131533022

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