Assume you are purchasing an investment and decide to invest in a company in the home remodeling business. You narrow the choice to Brick House, Inc., or Huff and Puff Corp. You assemble the following data: Click the icon to view the income statement data.) 9 (Click the icon to view data at end of current year.) (Click the icon to view data at beginning of current year.) (Click the icon to view more information.) Read the requirement. a. Quick ratio Select the formula and then enter the amounts to compute the quick ratio for each company. (Round the ratios to two decimal places, X.XX.) Quick ratio BH, Inc )/ HP, Corp. ( 4 b. Debt ratio Select the formula and then enter the amounts to compute the debt ratio for each company. (Round the ratios as percentages rounded to the nearest hundredth percent, X.XX%.) = Debt ratio BH, Inc. HP, Corp C. Interest coverage ratio = HP, Corp. Select the formula and then enter the amounts to compute the interest coverage ratio for each company. (Round the ratios two decimal places.) Interest coverage ratio BH, Inc. times times d. Accounts receivable turnover Select the formula and then enter the amounts to compute the accounts receivable turnover ratio for each company. (Round the ratios to two decimal places.) Accounts receivable turnover BH, Inc times times HP, Corp e. Inventory turnover Select the formula and then enter the amounts to compute the inventory turnover for each company. (Round the ratios to two decimal places.) Inventory turnover BH, Inc times HP, Corp. times f. Total asset tumover Select the formula and then enter the amounts to compute the total asset tumaver for each company. (Round the ratios to two decimal places.) Total asunt = turnover BH Inc times HP Com times qReturn on AS Select the formula and then enter the amounts to compute the retum on assets for each company. (Round the ratios as percentages rounded to the nearest hundredth percent, XXX%.) Return on assets BH, Inc HP. Corp. h. Return on equity Select the formula and then enter the amounts to compute the retum on equity for each company. Round the ratios as percentages rounded to the nearest hundredth percent, XXX%.) Ratum on equity BH. Inc HP Corp. 1. Eaminge per share Select the formula and then enter the amounts to compute earnings per share (EPS) for each company. (Round EPS to two decimal places.) Eamings per Bhare BH Inc HP Corp decimal places.) J. Price earnings ratio Select the formula and then enter the amounts to compute the price-earrings (PE) ratio for each company. (Round the PE ratio to = Price-camings ratio BH Inc HP. Corp. Which company's stock best fits your investment strategy? The common stock seems to best fit the investment strategy. Its price earnings ratio is , and based on the results of the ratio analysis performed - 1 Data table Selected income statement data for the current year: Brick House, Inc. Huff and Puff, Corp. Net sales $ 262,000 289,000 Cost of goods sold 187,000 229,000 EBIT 88,000 92,000 Interest expense 13,000 4,000 Net income 60,000 76,000 Data table Selected balance sheet data at the beginning of the current year: Brick House, Inc. Huff and Puff, Corp. Accounts receivable, net $ 29,500 $ 15,500 Inventory 83,000 78,000 Total assets 252,000 202,000 Common stock, $2.00 par, 3,000 shares 6,000 $2.50 par, 6,000 shares 15,000 Total stockholders' equity 124,000 159,000 Print Done - X Data table Selected balance sheet and market price data at the end of the current year: Brick House, Inc. Huff and Puff, Corp. Current assets: Cash 25,000 $ 13,000 Short-term investments 104,000 111,000 Accounts receivables, net 28,000 23,000 Inventory 69,000 72,500 Prepaid expenses 5,000 2,000 Total current assets 231,000 221,500 Total assets 265,000 259,000 Total current liabilities 77,000 42,000 Total liabilities 102,000 88,000 Common stock, $2.00 par, 3,000 shares 6,000 $2.50 par, 6,000 shares 15,000 Total stockholders' equity 163,000 171,000 Market price per share of common stock 60 $ 68 BX More info Your investment strategy is to purchase the stock of the company that has a low price-earnings ratio but seems to be in good shape financially. Assume that you analyzed all other factors and your decision depends on the results of the ratio analysis to be performed
