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Assume you are purchasing an investment and decide to invest in a company in the home remodeling business. You narrow the choice to Our House,
Assume you are purchasing an investment and decide to invest in a company in the home remodeling business. You narrow the choice to Our House, Inc., or Strong Home Corp. You assemble the following data: B (Click the icon to view the income statement data.) B (Click the icon to view data at end of current year.) B (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 OH, Inc. SH, Corp. 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 OH, Inc SH, Corp. c. Interest coverage ratio Select the formula and then enter the amounts to compute the interest coverage ratio for each company. (Round the ratios to two decimal places.) OH, Inc. SH, Corp Interest coverage ratio 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.) OH, Inc. SH, Corp. = Accounts receivable turnover times times 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 OH, Inc. times SH, Corp. times f. Total asset turnover Select the formula and then enter the amounts to compute the total asset turnover for each company. (Round the ratios to two decimal places.) = Total asset turnover times OH, Inc. SH, Corp. times g. Return on assets Select the formula and then enter the amounts to compute the return on assets for each company. (Round the ratios as percentages rounded to the nearest hundredth percent, X.XX%.) = Return on assets OH, Inc. SH, Corp. h. Return on equity Select the formula and then enter the amounts to compute the return on equity for each company. (Round the ratios as percentages rounded to the nearest hundredth percent, X.XX%.) Return on equity OH, Inc. SH, Corp. i. Earnings 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.) = Earnings per share OH, Inc. SH, Corp. j. Price-earnings ratio Select the formula and then enter the amounts to compute the price-earnings (PE) ratio for each company. (Round the PE ratio to two decimal places. Price-earnings ratio OH, Inc. SH, Corp h. Return on equity Select the formula and then enter the amounts to compute the return on equity for each company. (Round the ratios as percentages rounded to the nearest hundredth percent, X.XX%.) Return on equity OH, Inc. SH, Corp. i. Earnings 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.) = Earnings per share OH, Inc. SH, Corp. j. Price-earnings ratio Select the formula and then enter the amounts to compute the price-earnings (PE) ratio for each company. (Round the PE ratio to two decimal places.) = Price-earnings ratio OH, Inc. SH, 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 based on the results of the ratio analysis performed. Data Table I LE VII W Selected income statement data for the current year: - X Data Table $ Our House, Inc. 298,000 140,000 Net sales Cost of goods sold EBIT $ Strong Home, Corp. 322,000 172.000 88,000 er the amounts to Interest expense 18,000 43,000 98.000 11,000 59,000 Net income Selected balance sheet data at the beginning of the current year: : Our House, Inc. , Accounts receivable, net ...........5 13,000 Inventory 27,000 Total assets 249,000 Common stock, $3.00 par, 4,000 shares .. $5.00 par, 4,000 shares 20.000 Total stockholders' equity ' 120,000 Strong Home, Corp. 7,000 12,000 214,000 12,000 Data Table er th 151,000 Selected balance sheet and market price data at the end of the current year: : Our House, Inc. Strong Home, Corp. Print Done $ $ Current assets Cash Short-term investments Accounts receivables, net 28,000 12,000 12,000 13,000 19,000 5,000 er th Inventory 17.000 3,000 20,000 1,500 Prepaid expenses Total current assets Total assets 72,000 228,000 54,000 58,500 225,000 25,000 er th Total current liabilities 102,000 91.000 12,000 Total liabilities Common stock, $3.00 par, 4,000 shares .... $5.00 par, 4,000 shares ........... Total stockholders' equity III Market price per share of common stock $ 20,000 128,000 55 134,000 syd $ 71 mond y based on the results of the ratio analysis performed
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