PA13-6 (Algo) Using Ratios to Compare Loan Requests from Two Companies [LO 13-4, LO 13-5, LO 13-6] The financial statements for Royale and Cavalier companies are summarized here: Royale Company Cavalier Company Balance Sheet Cash Accounts Receivable, Net. Inventory Equipment, Net Other Assets Total Assets Current Liabilities Notes Payable (long-term) Common Stock (par $20)) Additional Paid-In Capital Retained Earnings Total Liabilities and Stockholders' Equity. Income Statement Sales Revenue Cost of Goods Sold Other Expenses Net Income Other Data Per share price at end of year Selected Data from Previous Year Accounts Receivable, Net. Notes Payable (long-term) Equipment, Net Inventory Total Stockholders' Equity, $ 27,000 57,000 114,000 554,000 142,000 $ 894,000 $ 124,000 194,000 482,000 52,000 42,000 $ 894,000 $ 806,000 482,000 242,000 $ 82,000 $ 20.00 $ 49,000 194,000 554,000 97,000 576,000 $ 47,000 18,000 29,000 164,000 48,000 $ 306,000 $ 19,000 59,000 212,000 6,000 10,000 $306,000 $286,000 152,000 97,000 $ 37,000 $ 16.00 $ 16,000 59,000 164,000 40,000 228,000 These two companies are in the same business and state but different cities. Each company has been in operation for about 10 years. Both companies received an unqualified audit opinion on the financial statements. Royale Company wants to borrow $77,000 cash and Cavalier Company is asking for $32,000. The loans will be for a two-year period. Both companies estimate bad debts based on an aging analysis, but Cavalier has estimated slightly higher uncollectible rates than Royale. Neither company issued stock in the current year. Assume the end-of-year total assets and net equipment balances approximate the year's average and all sales are on account. Required: 1. Calculate the following ratios. (Use 365 days in a year. Round your intermediate calculations and final answers to 2 decimal places.) Cavalier Ratio Royale Company Company Tests of Profitability: 1. Net Profit Margin % % 2. Gross Profit Percentage 3. Fixed Asset Tumover % % 4. Return on Equity 5. Earnings per Share 6. Price/Earnings Ratio Tests of Liquidity: 7. Receivables Tumover 7. Days to Collect 8. Inventory Turnoveri 8. Days to Sell 9. Current Ratio Tests of Solvency: 10. Debt-to-Assets % %