Data from the current year's income statement Sales 864,500 988,500 Cost of goods sold 657,000 710,500 Interest expense 9,000 14,500 Income tax expense 16,500 27,500 Net income 182,000 236,000 Basic earnings per share 4.50 5.10 Beginning-of-year balance sheet data Accounts receivable, net 33,500 61,000 Current notes receivable (trade) - - Merchandise inventory 62,500 120,500 Total assets 447,000 429,500 Common stock, $5 par value 202,000 231,500 Retained earnings 110,500 105,000 a) Assess their asset management performance and short-term liquidity position using appropriate nancial ratios. (10 points) b) Both companies pay dividends of $4.25 per share and their stock prices are both at $84. Evaluate these companies from the perspective of an investor using appropriate nancial ratios. (10 points) 2. Below are the financial statements of two companies operating in the same industry: Carbon Company Yanky Company Data from the current year's balance sheet Assets Cash 22,000 38,000 Accounts receivable, net 42,000 64,500 Current notes receivable (trade) 10,000 8,000 Merchandise inventory 95,000 149,000 Prepaid expenses 5,500 8,000 Plant assets, net 325,500 342,000 Total assets 500,000 609,500 Liabilities and Equity Current liabilities 69,000 105,000 Long-term notes payable 90,500 113,500 Common stock, $5 par value 202,000 231,500 Retained earnings 138,500 159,500 Total liabilities and equity 500,000 609,500