P13-4 (Algo) Computing Ratios and Comparing Alternative Investment Opportunities LO 13-3, 13-4, 13-5, 13-6, 13-7, 13-8

The current year financial statements for Blue Water Company and Prime Fish Company are presented below.

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.

Support with identifying the:

1. Times interest earned ration
2. Cash coverage ration
3. Quality of income ratio