The current year financial statements for two competitors are presented below. Please analyze their financials. Note: if a ratio cannot be solved given the data provided, please leave it blank. There are a few ratios that cannot be solved given the information provided. Balance sheet: Cash Accounts receivable (net) Inventory Property & equipment (net) Other assets Total assets Current liabilities Long-term debt (interest rate: 15% ) Capital stock ($10 par value) Additional paid-in capital Retained earnings Total liabilities and stockholders' equity Income statement: Sales revenue (1/2 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 Profitability ratios: Ratio 1. Return on equity 2. Return on assets 3. Gross profit percentage 4. Net profit margin ம் Earnings per share 6. Quality of income Asset turnover ratios: 7. 8. Total asset turnover Fixed asset turnover BLUE WATER COMPANY % % % % Blue Water PRIME FISH COMPANY $ 41,300 39,500 97,500 144,500 84,300 407,100 % % % % $ $ 97,500 67,100 150,100 29,300 63,100 $ 407,100 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. $ 442,500 (239,500) (161,600) $ 41,400 Required: 1. Complete a schedule that reflects a ratio analysis of each company. (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).) 22.3 45% $ $ 33,300 Prime Fish $ 20,700 31,900 41,800 404,600 308,000 $ 807,000 $ 53,500 60,600 515,000 106,300 71,600 $ 807,000 $ 799,000 (400, 300) (311,300) 87,400 $ $ $ 149,500 18 45%
The current year financial statements for two competitors are presented below. Please analyze their financials. Note: if a ratio cannot be solved given the data provided, please leave it blank. There are a few ratios that cannot be solved given the information provided. Balance sheet: Cash Accounts receivable (net) Inventory Property & equipment (net) Other assets Total assets Current liabilities Long-term debt (interest rate: 15% ) Capital stock ($10 par value) Additional paid-in capital Retained earnings Total liabilities and stockholders' equity Income statement: Sales revenue (1/2 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 Profitability ratios: Ratio 1. Return on equity 2. Return on assets 3. Gross profit percentage 4. Net profit margin ம் Earnings per share 6. Quality of income Asset turnover ratios: 7. 8. Total asset turnover Fixed asset turnover BLUE WATER COMPANY % % % % Blue Water PRIME FISH COMPANY $ 41,300 39,500 97,500 144,500 84,300 407,100 % % % % $ $ 97,500 67,100 150,100 29,300 63,100 $ 407,100 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. $ 442,500 (239,500) (161,600) $ 41,400 Required: 1. Complete a schedule that reflects a ratio analysis of each company. (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).) 22.3 45% $ $ 33,300 Prime Fish $ 20,700 31,900 41,800 404,600 308,000 $ 807,000 $ 53,500 60,600 515,000 106,300 71,600 $ 807,000 $ 799,000 (400, 300) (311,300) 87,400 $ $ $ 149,500 18 45%
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
6
Transcribed Image Text:The current year financial statements for two competitors are presented below. Please analyze their financials.
Note: if a ratio cannot be solved given the data provided, please leave it blank. There are a few ratios that cannot be solved given
the information provided.
Balance sheet:
Cash
Accounts receivable (net)
Inventory
Property & equipment (net)
Other assets
Total assets
Current liabilities
Long-term debt (interest rate: 15 %)
Capital stock ($10 par value)
Additional paid-in capital
Retained earnings
Total liabilities and stockholders' equity
Income statement:
Sales revenue (1/2 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
Profitability ratios:
1.
2.
3.
4.
5.
6.
Ratio
7.
8.
9.
10.
Return on equity
Return on assets
Gross profit percentage
Net profit margin
Earnings per share
Quality of income
Asset turnover ratios:
Total asset turnover
Fixed asset turnover
Receivable turnover
Inventory turnover
Liquidity ratios:
11. Current ratio
12.
13.
Quick ratio
Cash ratio
Solvency ratios:
14. Times interest earned ratio
15. Cash coverage ratio
16. Debt/equity ratio
Market ratios:
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.
17. Price/earnings ratio
18. Dividend yield ratio
Required:
1. Complete a schedule that reflects a ratio analysis of each company. (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).)
BLUE WATER
COMPANY
%
%
%
%
%
PRIME FISH
COMPANY
Blue Water
%
%
%
%
$ 41,300
39,500
97,500
144,500
84,300
$ 407,100
$
%
97,500
67,100
150,100
29,300
63,100
$ 407,100
$ 442,500
(239,500)
(161,600)
$ 41,400
$
22.3
45%
$ 33,300
Prime Fish
$ 20,700
31,900
41,800
404,600
308,000
$ 807,000
$
53,500
60,600
515,000
106,300
71,600
$807,000
$ 799,000
(400, 300)
(311,300)
87,400
$
$
18
45%
$ 149,500
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