gEnabled: 88C-MH Lab 1: Ratio Analysis i The financial statements for Armstrong and Blair companies for the current year are summarized below: Statement of Financial Position Armstrong Company Blair Company 28 Cash Accounts receivable (net) Inventory Property, plant, and equipment (net) Other non-current assets Total assets Current liabilities Retained earnings $ 35,800 $ 33,000 32,000 210,000 172,500 96,000 45,000 36,500 475,000 330,000 $ 546,300 $ 919,500 $ 127,500 91,500 182,500 52,000 92,800 $ 42,500 84,000 575,000 131,000 87,000 $ 919,500 Long-term debt (10%) Share capital Contributed surplus Total liabilities and shareholders' equity $ 546,300 Statement of Earnings Sales revenue (1/3 on credit) $ 560,000 Expenses (including interest and income tax) Cost of sales Net earnings Selected data from the financial statements for the previous year follows: (308,000) (190,400) $ 61,600 $ 110,400 $ 920,000 (460,000) (349,600) Accounts receivable (net) $31,000 $ 51,000 Inventory 81,000 Long-term debt 91,500 26,000 84,000 Other data: Share price year-end 18 $ 15 Income tax rate 30% 30% Dividends declared and paid $47,000 Shares outstanding 15,000 $260,000 50,000 < Prev 13 of 14 Next > Cop W E 13 00:34:19 eBook The companies are in the same line of business and are direct competitors in a large metropolitan area. Both have been in business approximately ten years, and each has had steady growth. The management of each has a different viewpoint in many respects. Blair Company is more conservative, and as its president said, "We avoid what we consider to be undue risk." Neither company is publicly held. Armstrong Company has an annual audit by an independent auditor, but Blair Company does not. Required: 1. Complete a schedule that reflects a ratio analysis of each company. Use ending balances if average balances are not available. (Round intermediate calculations and final answers to 2 decimal places.) HINT: To calculate Current Ratio, you will need to first calculate the total Current Assets. Ratio Armstrong Company Blair Company Profitability ratios Return on equity % % Return on assets % % Gross profit percentage % % Asset turnover ratios. Fixed asset turnover times times Receivables turnover times times Inventory turnover times times Liquidity ratios: Current ratio Debt-to-equity ratio Market tests Price/earnings ratio Q Q 0 < Prev 13 of 14 Next > 3 0:34:11 dent said, "we avoid what we consider to be un held. Armstrong Company has an annual audit by an independent auditor, but Blair Company c Required: 1. Complete a schedule that reflects a ratio analysis of each company. Use ending balances if e available. (Round intermediate calculations and final answers to 2 decimal places.) HINT: To calculate Current Ratio, you will need to first calculate the total Current Assets. Ratio Armstrong Company Blair Company Profitability ratios: Return on equity % % ook Return on assets % % Gross profit percentage % % Asset turnover ratios: Fixed asset turnover times times Receivables turnover times times Inventory turnover times times Liquidity ratios: Current ratio Debt-to-equity ratio Market tests: Price/earnings ratio