Group Case Study Income Statements Lewis 25,120,000 Ramsey $ 50,420,000 Net Sales Costs and expenses: Cost of Goods Sold Selling Expenses Administrative Expenses Total Costs & Expenses Income from Operations Interest Expense Income Before Income Taxes Income Tax Expense Net Income Earnings Per Share $ $ $ $ $ 12,284,000 9,645,200 1,972,000 23,901,200 1,218,800 388,000 830,800 400,000 430,800 $ 29,668,000 $ 14,216,400 $ 4,868,000 $ 48,752,400 $ 1,667,600 $ 456,000 $ 1,211,600 $ 600,000 611,600 $ 10.19 $ $ $ $ $ $ 4.31 Balance Sheets Assets Cash Marketable Securities (at cost) Accounts Receivable (net) Inventory Prepaid Expenses Property, Plant, & Equipment (net) Intangibles & Other Assets Total Assets $ $ $ $ $ $ Lewis 160,000 406,800 1,105,600 1,259,600 108,800 5,827,200 1,106,400 9,974,400 Ramsey 384,800 169,200 $ 1,970,800 $ 2,506,800 $ 228,000 $ 13,104,000 $ 289,600 $ 18,653,200 $ Liabilities & Stockholders' Equity Accounts Payable Notes Payable Income Taxes Payable Bonds Payable Common Stock, $20 par value Additional Paid In Capital Retained Earnings Total Liabilities & Stockholders' Equity $ $ $ 688,000 300,000 100,400 4,000,000 2,000,000 1,219,600 1,666,400 9,974,400 $ 1,145,200 800,000 146,800 $ 4,000,000 $ 1,200,000 $ 7,137,200 $ 4,224,000 $ 18,653,200 $ is Required: 1. Calculate the 9 financial ratios listed below for Lewis and Ramsey 2. Indicate which Co. has the stronger ratio and why 3. What does the ratio reveal about the Company's results 4. Which Company provides the better overall operarting risk and why Liquidity 1. Current ratio 2. Quick ratio Activity Ratios 1. Receivable turnover 2. Inventory turnover Leverage 1. Debt to Equity 2. Times interest earned ratio 3. Debt ratio Profitability Ratios 1. Return on assets 2. Gross margin percentage