The 2011 financial statements for Armstrong and Blair companies are summarized below:

The companies are in the same line of business and are direct competitors in a large metropolitan area. 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. Blair Company is more conservative, and as its president said, "We avoid what we consider to be undue risk." Neither company is publicly held. Armstrong Company has an annual audit by an independent auditor, but Blair Company does not.
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1. Complete a schedule that reflects a ratio analysis of each company. Compute the ratios discussed in the chapter. Use ending balances if average balances are not available.
2. A client of yours has the opportunity to buy 10 percent of the shares in one or the other company at the share prices given and has decided to invest in one of the companies. Based on the data given, prepare a comparative written evaluation of the ratio analyses (and any other available information) and give your recommended choice with supporting explanation.

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Armstrong Company Blair Company Statement of Financial Position Cash Trade receivables (net) $ 35,000 40,000 $ 22,000 30,000 Inventory 100,000 40,000 Property, plant, and equipment (net) 140,000 400,000 Other non-current assets 85,000 308,000 Total assets $400,000 $800,000 Current liabilities $100,000 $ 50,000 Long-term debt (10%) Share capital 60,000 70,000 150,000 500,000 Contributed surplus 30,000 110.000 Retained earnings 60,000 70,000 Total liabilities and shareholders' equity $400,000 $800,000 Income Statement Sales revenue (1/3 on credit) $450,000 $810,000 Cost of sales Expenses (including interest and income tax) Profit (245,000) (405,000) (160,000) (315,000) $ 45,000 $ 90,000