P13-5 Comparing Alternative Investment Opportunities 1. Complete a schedule that reflects a ratio analysis of each company

P13-5 Comparing Alternative Investment Opportunities The 2015 financial statements for the Emst and Young companies are summarized here: Balance sheet Cash Accounts receivable (net) Inventory Operational assets (net) Other assets Total assets Current liabilities Long-term debt (10%) Capital stock (par $10) Contributed capital in excess of par Retained earnings Total liabilities and stockholders' equity Income statement Sales revenue (1/3 on credit) Cost of goods sold Expenses (including interest and income tax) Net income Selected data from the 2014 statements Accounts receivable (net) Inventory Long-term debt Other data Per share price at end of 2015 (offering price) Average income tax rate Dividends declared and paid in 2015 Ernst Company 42,400 39,900 100,400 141,500 84,700 408,900 97,600 63,800 148,500 29,500 69,500 408,900 448, 100 (241,000) (16,200) 190,900 19,000 95,700 61,800 24 30% 33,600 Young Company 22,800 33,000 41 ,300 402,900 306,000 806,000 47,500 58,100 511 ,600 104,900 83,900 806,000 803,600 (398,300) (312,600) 92,700 39,900 45,300 48,900 22 30% 149,800 The companies are in the same line Of business and are direct competitors in a large metropolitan area. 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. Young is more conservative, and as its president has said, "We avoid what we consider to be undue risk." Neither company is publicly held. Ernst Company has an annual audit by a CPA but Young Company does not. 1. Complete a schedule that reflects a ratio analysis of each company.