COMPARING INDUSTRY RATIOS

You are interested in investing in a regional hotel company and have investigated the financial statements of four potential investments. Use the information in the table below to answer the questions at the bottom of the page.

	Hotel N	Hotel J	Hotel C	Hotel W
Information from the income statement
Total revenue	10,099,000	3,816,000	428,806	1,277,550
Total expenses	9,503,000	3,618,000	354,461	1,822,748
Information from the balance sheet
Current assets	1,946,000	1,020,000	68,629	526,549
Total assets	8,668,000	8,183,000	262,388	3,783,127
Current liabilities	2,356,000	895,000	101,091	693,809
Total liabilities	4,587,000	5,944,000	456,441	3,089,318
Total number of common stock outstanding	225,800	389,000	32,312	168,238

(Use the table on the following page for your answers.)

1. What is the net profit (or net loss) for each company?

2. Calculate the return on sales for each company.

3. Calculate the total stockholders equity for each company.

4. What is the current ratio for each company?

5. Calculate the return on equity ratio for each company.

6. What is the debt to equity ratio for each company?

7. Calculate the basic earnings per share for each company.

	Hotel N	Hotel J	Hotel C	Hotel W
1. Net income (net profit or net loss)
2. Return on sales
3. Current ratio
4. Stockholders equity
5. Return on equity
6. Debt-to-equity ratio
7. Earnings per share (basic)

8. Which company would you rather invest in? Why?