Financial Planning and Analysis Name: The financial statement for AB Corporation and XY Corporation are shown below: P Current Assets Cash Accounts Receivable, net Inventory Total Current Assets 100,000 80,000 180,000 P AB Corporation Liabilities 20.000 Accounts Payable P 80,000 Bonds Payable (long-term) 50.000 Total Liabilities 150,000 Stockholders' Equity Share Capital P 500,000 Share Premium - 150.000 Retained Earnings 350,000 Total Stockholders' Equity P 500,000 Total Liabilities and Stockholders' Equity P P Long-term Assets Fixed Assets Less: Accum. Depreciation Net Fixed Assets Total Assets 150,000 70,000 100,000 320,000 500,000 P P *AB Corp. has 75,000 shares outstanding Sales (on credit) P Cost of Goods Sold Gross Profit P Selling and Administrative Expense Operating Profit P Interest Expense Earnings before Taxes P Tax Expense Net Income 1,250.000 750,000 500,000 307.000 193.000 30.000 163.000 48.900 114,100 Current Assets Cash Marketable Securities Accounts Receivable, net Inventory Total Current Assets 75,000 210,000 285,000 P XY Corporation Liabilities 35,000 Accounts Payable P 7,500 Bonds Payable long-term) 70,000 Total Liabilities 50.000 162.500 Stockholders' Equity Share Capital P Share Premium 500.000 Retained Earnings -225,000 Total Stockholders' Equity P 275.000 437.500 Total Liabilities and Stockholders' Equity P 75,000 30,000 17,500 152.500 Long-term Assets Fixed Assets Less: Accum. Depreciation Net Fixed Assets Total Assets P P P 437,500 *XY Corp. has 75,000 shares outstanding Sales con credit) P Cost of Goods Sold Gross Profit P Selling and Administrative Expense Operating Profit P Interest Expense Earnings before Taxes P Tax Expense Net Income P 1.000.000 600.000 400.000 274.000 126.000 21.000 105,000 31.500 73.500 Required: Compute the following ratios for the two companies: 11. Fixed Assets to Long-term Liabilities 12. Fixed Assets to Total Equity 13. Fixed Assets to Total Assets 14. Gross Profit Margin 15. Operating Profit Margin 16. Net Profit Margin 17. Return on Assets 18. Return on Equity 19. Earnings per Share 20. Book Value per Share of Ordinary Share 8. Debt Ratio 9. Equity Ratio 10. Debt to Equity Ratio a. To which company would you, as credit manager for a supplier, approve the extension of short-term trade credit? Why? b. To which company would you, as credit manager for a bank, approve the credit? Why? c. In which one would you buy stock? Why? Submission date: March 27, 2021