Comparative statement data for Brooks Company and Shields Company, two competitors, are presented here. All balance sheet data are as of December 31, 1998, and Compute ratios; comment on December 31, 1997.

Additional information: Cash provided by operations for 1998 was \(\$ 22,000\) for Brooks and \(\$ 185,000\) for Shields.
\section*{Instructions}

(a) Comment on the relative profitability of the companies by computing the return on assets ratios and the profit margin ratios for both companies.

(b) Comment on the relative liquidity of the companies by computing working capital, the current ratios, and the current cash debt coverage ratios for both companies.

(c) Comment on the relative solvency of the companies by computing the debt to total assets ratio and the cash debt coverage ratio for each.

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Brooks Company Shields Company 1998 1997 1998 1997 Net sales $250,000 Cost of goods sold 160,000 $1,200,000 720,000 Operating expenses 51,000 252,000 Interest expense 3,000 10,000 Income tax expense 11,000 65,000 Current assets 130,000 $110,000 700,000 $650,000 Plant assets (net) 305,000 270,000 800,000 750,000 Current liabilities 60,000 52,000 250,000 275,000 Long-term liabilities 50,000 68,000 200,000 150,000 Common stock 260,000 210,000 750,000 700,000 Retained earnings 65,000 50,000 300,000 275,000