The current year financial statements for Blue Water Company and Prime Fish Company are presented below. Balance sheet Cash Accounts receivable (net) Inventory Property & equipment (net) Other assets Total assets Current liabilities Long-term debt (interest rate: 10 %) Capital stock ($10 par value) Additional paid-in capital Retained earnings Total liabilities and stockholders' equity Income statement Sales revenue (1/3 on credit) Cost of goods sold Operating expenses Net income Other data Per share stock price at end of current year Average income tax rate Dividends declared and paid in current year Blue Water $ 42,800 47,000 90,000 167,000 85,800 $ 432,600 $ 90,000 77,600 160,600 30,800 73,600 $432,600 $ 420,000 (232,000) (164,600) $ 23,400 $23.8 30% $ 34,800 Prime Fish $ 19,200 36,400 50,800 422,600 323,000 $ 852,000 $ 76,000 63,600 530,000 107,800 74,600 $ 852,000 $ 784,000 (401,800) (312,800) $ 69,400 $ 33 30% $ 157,000 Both companies are in the fish catching and manufacturing business. Both have been in business approximately 10 years, and each has had steady growth. The management of each has a different viewpoint in many respects. Blue Water is more conservative, and as ts president has said, "We avoid what we consider to be undue risk." Neither company is publicly held.
The current year financial statements for Blue Water Company and Prime Fish Company are presented below. Balance sheet Cash Accounts receivable (net) Inventory Property & equipment (net) Other assets Total assets Current liabilities Long-term debt (interest rate: 10 %) Capital stock ($10 par value) Additional paid-in capital Retained earnings Total liabilities and stockholders' equity Income statement Sales revenue (1/3 on credit) Cost of goods sold Operating expenses Net income Other data Per share stock price at end of current year Average income tax rate Dividends declared and paid in current year Blue Water $ 42,800 47,000 90,000 167,000 85,800 $ 432,600 $ 90,000 77,600 160,600 30,800 73,600 $432,600 $ 420,000 (232,000) (164,600) $ 23,400 $23.8 30% $ 34,800 Prime Fish $ 19,200 36,400 50,800 422,600 323,000 $ 852,000 $ 76,000 63,600 530,000 107,800 74,600 $ 852,000 $ 784,000 (401,800) (312,800) $ 69,400 $ 33 30% $ 157,000 Both companies are in the fish catching and manufacturing business. Both have been in business approximately 10 years, and each has had steady growth. The management of each has a different viewpoint in many respects. Blue Water is more conservative, and as ts president has said, "We avoid what we consider to be undue risk." Neither company is publicly held.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Oo.2.
Subject :- Account
Transcribed Image Text:The current year financial statements for Blue Water Company and Prime Fish Company are presented below.
Balance sheet
Cash
Accounts receivable (net)
Inventory
Property & equipment (net)
Other assets
Total assets
Current liabilities
Long-term debt (interest rate: 10%)
Capital stock ($10 par value)
Additional paid-in capital
Retained earnings
Total liabilities and stockholders' equity
Income statement
Sales revenue (1/3 on credit)
Cost of goods sold.
Operating expenses
Net income
Other data
Per share stock price at end of current year
Average income tax rate
Dividends declared and paid in current year
Show Transcribed Text
Profitability ratios:
1. Return on equity ratio
2. Return on assets ratio
Ratio
3. Gross profit margin
4. Net profit margin ratio
5. Earnings per share ratio
Asset turnover ratios:
6. Total asset turnover ratio
7. Fixed asset turnover ratio
8. Receivable turnover ratio
9. Inventory turnover ratio
Liquidity ratios:
10. Current ratio
11. Quick ratio
12. Cash ratio
Solver ratios:
13. Debt to equity ratio
Market ratios:
14. Price earnings ratio
15. Dividend yield ratio
Both companies are in the fish catching and manufacturing business. Both have been in business approximately 10 years, and each
has had steady growth. The management of each has a different viewpoint in many respects. Blue Water is more conservative, and as
its president has said, "We avoid what we consider to be undue risk." Neither company is publicly held.
BLUE WATER
COMPANY
Blue Water
$ 42,800
47,000
90,000
167,000
85,800
$ 432,600
%
%
%
%
$ 90,000
77,600
160,600
30,800
73,600
$ 432,600
Required:
1. Using year-end balances for all ratios, compute the following ratios:
Note: Round your intermediate calculations and final answers to 2 decimal places. Enter percentage answers rounded to 2
decimal places (i.e. 0.1234 should be entered as 12.34).
%
$ 420,000
(232,000)
(164,600)
$ 23,400
$23.8
30%
$ 34,800
PRIME FISH
COMPANY
Prime Fish
$ 19, 200
36,400
50,800
422, 600
323,000
$ 852,000
%
%
%
%
$ 76,000
63,600
530,000
107,800
74,600
$ 852,000
%
$ 784,000
(401,800)
(312,800)
$ 69,400
$ 33
30%
$ 157,000
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