2. Based on the handout for Smith Inc. and Jones Corp. (i) calculate the following ratios, figures, and/or Percentages; (ii) for each item (a through b), circle the company that has the better result and then, (iii) indicate which company is in better financial shape overall, BASED ON THE ANSWERS YOU HAVE CALCULATED. (10 marks) (NOTE: just use year-end information; no average values available) a. Working Capital: Smith: Jones: b. Days of Sales in Inventory: Smith: Jones: c. Quick Ratio: Smith: Jones: d. Profit Margin: Smith Jones: e. Days of Accounts Payable: Smith: Jones: 1. Return on Common Shareholders' Equity: Smith Jones Smith Inc. ($) Jones Corp. ($) $ 40,000 Assets Current Assets Cash Cash Equivalents A/R Inventory Total Current Assets Capital Assets Capital Assets Acc.Deprec. Net Capital Assets Total Assets 80,000 105.000 225,000 $ $ $ $ $ 35,000 7,500 90,000 75.000 207,500 $ vil na 450,000 (150.000) 300.000 525,000 $ 500,000 $ (220,000 $ 280.000 $ 487,500 $ $ $ 100,000 105,000 205,000 $ $ $ 80,000 210,000 290,000 Liabilities AP Longterm Bonds Payable Total Liabilities Shareholder's Equity Common Stock Retained Eamings Total Shareholder's Equity Total Liabilities and S/E (note: shares outstanding) $ 220,000 $ 100.000 $ 320,000 $ 525,000 100,000 $ 140,000 $ 57.500 $ 197,500 $ 487,500 75,000 Sales COGS Gross Profit Selling & Admin exp Depreciation exp Op. Profit Interest exp Earnings Before Taxes al will $ 1,250,000 $ 750,000 $ 500,000 $ 257,000 $ 50.000 193,000 8.000 185,000 92.500 $ 92,500 $ 1,000,000 $ 690.000 $ 310,000 194,000 43.000 73,000 21.000 52,000 $ 26.000 $ 26,000 Tax exp Net Income