1. Jeff Smith realizes that the first thing he must do is compare the liquidity, leverage, activity, and profitability ratios of the two companies. Using the income statement and balance sheet data shown in Tables 14, prepare a detailed comparison report indicating the strengths and weaknesses of each company. (Include the same ratios as reviewed in case 2.)

2. Jim Clancy, a recently hired intern, has suggested to Jeff that he should include an analysis of common size statements in the report. Is Jim right? Of what use is such an analysis? Prepare common size balance sheets and income statements for Duralex and APEX Molding and discuss your findings.

3. Jim has also recommended that a DuPont analysis be done. How can such an analysis be performed, and what information does it indicate about the relative performance of the two companies? (Perform and include a detailed DuPont Analysis.)

4. What are some limitations regarding the various analyses that have been suggested above? What additional data would Jim and Jeff need to improve their findings? Are there any other calculations and comparisons that would be helpful? Please explain.

5. After collecting, compiling, and analyzing the data, what conclusions and recommendations would Jeff be justified in making in his report to Marcus?

6. In your opinion, how acute is the problem facing Duralex, Inc.? What strategic moves do you think Marcus could make to alleviate the problems?

7. How accurate are the analysts in their recommendations of the two firms?