L ife * Requirements 20 1. Using the financial statements given, compute the following ratios for both companies for 2019 and 2018. Assume all sales are credit sales. Round all ratios to two decimal places. a. Current ratio b. Cash ratio c. Inventory turnover d. Accounts receivable turnover Gross profit percentage f. Debt ratio g. Debt to equity ratio h. Profit margin ratio i. Asset turnover ratio j. Rate of return on common stockholders' equity k. Earnings per share 1. Price/earnings ratio m. Dividend yield n. Dividend payout 2. Compare the companies' performance for 2019 and 2018. Make a recommendation to Canyon Canoe Company about investing in these companies. Which company would be a better investment, The Paddle Company or Recreational Life Vests? Base your answer on ability to pay current liabilities, ability to sell merchandise and collect receivables, ability to pay long-term debt, profitability, and attractiveness as an investment. CP15-38 (book/static) Question Help Canyon Cance Company wants to invest some of its excess cash in trading securities and is considering two investments, The Paddle Company (PC) and Recreational Life Vests (RLV). The income statement, balance sheet, and other data for both companies follow for 2019 and 2018, as well as selected data for 2017: :: (Click the icon to view the data.) Read the requirements Requirement 1. Compute each ratio for both companies for 2019 and 2018. Assume all sales are credit sales. Round all ratios to two decimal places. a. Current ratio Begin by selecting the correct formula Current ratio Comparative Financial Statements Years Ended December 31, 2019 2018 2017 Comparative Financial Statements Years Ended December 31, 2019 2018 2017 Income Statement Net Sales Revenue $ $ 430,489 $ 258,756 425,410 256,797 410,570 $ 299,110 383,870 280.190 Cost of Goods Sold Gross Profit 171,733 153,880 168,613 151,922 111,460 78.290 103,680 70,830 Operating Expenses Operating Income 17.853 865 16,691 788 Interest Expense Income before Income Tax 16,988 5,137 11,851 $ 33,170 2.780 30,390 8.780 21,610 $ 15,903 4,809 11,094 Income Tax Expense 32,850 2.980 29,870 8,630 21.240 $ Net Income $ Balance Sheet Assets Cash and Cash Equivalents Accounts Receivable Merchandise Inventory Other Current Assets Total Current Assets 69,159 $ 44,798 79.919 15,494 70,793 44,452 $ 66.341 66,341 16,264 44,104 76,363 65,730 $ 39,810 68,500 24.450 55 270 38,650 $ 65,230 37.630 36,460 59,930 209,370 89,834 197,850 90.776 198,490 116,760 315.250 $ 196,780 116,270 Long-term Assets $ 299 204 $ 288.626 5 276.482 $ 313.050 s 310,640 69,554 $ 31,682 60,232 29,936 90,810 $ 96,310 187,120 90,010 105,890 195,900 101,236 90,168 Total Assets Liabilities Current Liabilities Long-term Liabilities Total Liabilities Stockholders' Equity Common Stock Retained Earnings Total Stockholders' Equity Total Liabilities and 72,795 125,173 197.968 80,885 117,573 198,458 111,530 16,600 128,130 102.480 14.670 117.150 197,668 103,840 $ 299,204 $ $ Stockholders' Equity 288,626 315.250 $ 313.050 Print Done $ Other Data Market price per share Annual dividend per share Weighted average number of shares outstanding 21.38 $ 0.32 33.82 0.30 46.37 $ 0.53 51.64 0.45 9,000 8,000 9,000 8,000 Print Done