Selected financial data for Black & Decker and Snap-On Tools for 2004 are presented here (in millions).

Net sales Cost of goods sold Selling and administrative expenses Interest expense Other income Income tax expense Net income (before irregular items)

Ratio Return on common stockholders’

equity Debt to total assets Price-earnings Black & Snap-On Decker Tools Income Statement Data for Year

$5,398.4 $2,407.2 3,432.9 1,319.8 1,336.3 945.1 57.9 23.0

(33.0) (1.1)

163-2 38.7

$" 447.1 ee Olye Problems: Set B 697 Compute selected ratios, and compare liquidity, profitability, and solvency for two companies.

(SO 6)

698 CHAPTER 13 Financial Analysis: The Big Picture Balance Sheet Data (End of Year)

Current assets SD O2 Tee $1,192.6 Property, plant, and equipment (net) 754.6 313.6 Other assets 1,849.0 783.9 Total assets $5,530.8 $2,290.1 Current liabilities $1,792.6 $ 674.2 Long-term debt 2725 5052 Total stockholders’ equity S55 on UO Total liabilities and stockholders’ equity $5,530.8 $2,290.1 Beginning-of-Year Balances Total assets $4,222.5 S2138-5 Total stockholders’ equity 846.5 1,010.9 Current liabilities 193 d21 567.2 Total liabilities 3,376.0 (i ATT:

Other Data Average receivables (net) $ 927.6 $ 618.7 Average inventory 845.9 346.5 Net cash provided by operating activities 619.1 146.8 Capital expenditures 117.8 38.7 Cash dividends ef BW ET Instructions

(a) For each company, compute the following ratios.

(1) Current ratio.

(2) Receivables turnover.

(3) Average collection period.

(4) Inventory turnover.

(5) Days in inventory.

(6) Profit margin.

(7) Asset turnover.

(8) Return on assets.

(9) Return on common stockholders’ equity.

(10) Debt to total assets.

(11) Times interest earned.

(12) Current cash debt coverage.

(13) Cash debt coverage.

(14) Free cash flow.

(b) Compare the liquidity, solvency, and profitability of the two companies.