Financial Statement Analysis Through Ratios The current year financial statements for two companies is presented below. Blue Water Prime Fish Balance sheet: Cash Accounts receivable (net) Inventory Property & equipment (net) Other assets Total assets Current liabilties Long-term debt (interest rate: 10%) Capital stock (518 par value) Additional paid-in capital Retained earnings Total liabilities and stockholders' equity Income statement: Sales revenue (1/3 on credit) Cost of goods sold Operating expenses Net Income Other data: Per share stock price at end of current year Average income tax rate Dividends declared and paid in current year $ 41,680 41,000 96,000 149,000 84,600 5 412,200 $ 96,000 69,209 152,200 29,500 65 200 $ 412,200 $ 20,400 32,800 43,60e 408, 200 311.000 $ 816,00 $ 58,000 61,200 518,000 186,600 72,200 $ 816,000 $ 438,000 (238,000) (162,200) $ 37.800 $ 796,000 (400,600) (311,600 $ 83.800 $ 22.6 38% $ 33,600 $ 21 30% $ 151,000 Both companies are in the fish catching and manufacturing business. Both have been in business approximately 10 years, and each has had steady growth. The management of each has a different viewpoint in many respects Blue Water is more conservative, and as its president has said. "We avoid what we consider to be undue risk." Neither company is publicly held 1 Required: 1. Complete a schedule that reflects a ratio analysis of each company. (Round your intermediate decimal places. Enter percentage answers rounded to 2 decimal places (i.e. 0.1234 should be e * Answer is complete but not entirely correct. IS Ratio BLUE WATER COMPANY PRIME FISH COMPANY 12.03 % 15.30 % 9.17% 45.66 % % 10.27 49.67 95 000 III 8.63 % % 10.53 1.62 s 2.48 GA 7 0.98 1.06 1.88 1.11 X 8.09 Profitability ratios 1 Return on equity 2 Return on assets 3. Gross profit percentage 4 Net profit margin 5 Earnings per share 6 Quality of income Asset turnover ratios: 7 Total asset turnover 8. Fixed asset turnover 9 Receivable turnover 10. Inventory turnover Liquidity ratios Current ratio 12 Quick ratio 13. Cash ratio Solvency ratios 14. Times interest eamed ratio 15. Cash coverage ratio 16. Debt/equity ratio Market ratios 17 Price/earnings ratio 18. Dividend yield ratio 3.56 2.48 9.91 11 1.67 1.86 0.86 0.92 0.35 0.43 5.46 0.43% 0.67 13.69 0.35 0.17 9.11 12.96 13.90 % 9.78 %