20. [Comprehensive review of ratios, operating and financial leverage. and financial statements] Company and Company L operate in the same industry and have equal market shares Their operating and financing characteristics differ as Company C has adopted newer manufacturing practices It operates highly auto- mated plants and maintains tight control of inventories consistent with just-in-time inventory techniques. To achieve these inven- tory levels. close coordination with suppliers and customers 15 needed; collections and payments are relatively prompt Financial data for 2002 for Company C and Company L follow: Company C Company I. Gross plant assets $175,000 $65.000 Current ratto 9.475 3.592 Quick ratio 8.875 3.192 Return on equity 0130) 0.167 Cash from operations 5.275 0.942 current liabilities Decline in receivables ($3,000) ($4.500) Decline in inventory 0 (6.000) Decline in accounts payable 0 (5.000) Cash from operations 52.750 28,250 Cash from financing: (1.000) (5,000) decline in short-term debt Cash for investment 0 0 Common size statements for Company and Company L. prepared by your assistant, follow. but they are unidentified as to which company they belong to. Sales in 2002 for both compa- nies were one-sixth less than in 2001. Common-Size Statements Company? Company? 2001 2002 2001 2002 Sales 100.00% 100.00% 100.00% 100.00% COGS 63.89 66.67 58.33 66 67 Sales and administrative cxpenses 1944 20 00 17.78 20:00 Interest 1 67 2.00 3.89 4.67 Taxes 3.75 2.83 5.00 217 Subtotal 88 75% 91.50% 85.00% 93 50% Net income 11.25% 8.50% 15.00% 6 50% Finally, your assistant also computed the ratios shown for 2002 (again unidentified as to company) In addition, the ratios are mixed ap. Some in column I belong to Company C and some to Company L (similarly, the ratios in column 2 are a mix- ture of Company C and Company Li: Inventory turnover Receivable turnover Payable turnover Long-term debt to capital Column Column 2 6.667 16.667 11.111 7.409 25.000 4.444 0.195 0429 (When answering the following questions, round all numbers to the nearest $50.)