3. Following are data from the statements of two companies selling similar products:

Current Year-End Balance Sheets
	Dodger Company	Brave Company
Cash.....................................................................	$ 21,900	$ 20,000
Notes receivableshort-term................................	7,700	3,200
Accounts receivable, net.......................................	42,000	64,000
Inventory...............................................................	58,800	87,680
Prepaid expenses.................................................	1,680	1,520
Plant and equipment, net......................................	202,120	274,400
Total assets..........................................................	$334,200	$450,800
Current liabilities...................................................	$ 36,000	$ 78,000
Mortgage payable..................................................	70,000	80,000
Common stock, $10 par value...............................	140,000	160,000
Retained earnings.................................................	88,200	132,800
Total liabilities and stockholders equity.................	$334,200	$450,800
Data from the Current Years Income Statement
Sales....................................................................	$672,000	$880,000
Cost of goods sold................................................	528,080	699,840
Interest expense....................................................	4,200	5,600
Net income............................................................	25,373	28,896
Beginning-of-Year Data
Inventory...............................................................	$ 53,200	$ 85,120
Total assets..........................................................	345,800	443,200
Stockholders equity..............................................	217,000	285,120

A. Calculate current ratios, acid-test ratios, inventory turnovers, and days sales uncollected for the two companies. Then state which company you think is the better short-term credit risk and why.

B. Calculate return on total assets employed and return on stockholders equity. Then, under the assumption that each companys stock can be purchased at book value, state which companys stock you think is the better investment and why