Comparative statement data for Omaz Company and Wise Company, two competitors, are presented below. All balance sheet data are as of December 31, 2014.

Omaz Company Wise Company 2014 2014 Net sales $450,000 $900,000 Cost of goods sold 225,000 450,000 Operating expenses 130,000 150,000 Interest expense 6,000 10,000 Income tax expense 15,000 75,000 Current assets 180,000 700,000 Plant assets (net) 600,000 800,000 Current liabilities 75,000 230,000 Long-term liabilities 190,000 200,000 Net cash provided by operating activities 46,000 180,000 Capital expenditures 20,000 50,000 Dividends paid -0- 5,000 Average number of shares outstanding 200,000 500,000 Instructions

(a) Compute the net income and earnings per share for each company for 2014.

(b) Comment on the relative liquidity of the companies by computing working capital and the current ratio for each company for 2014.

(c) Comment on the relative solvency of the companies by computing the debt to assets ratio and the free cash flow for each company for 2014.

AppendixLO1