Question
Please conduct the ratio analysis (show me your formula and calculation for the full credit) and tell me for which company you are going to
Please conduct the ratio analysis (show me your formula and calculation for the full credit) and tell me for which company you are going to invest. Why?
Balance Sheet
Stanton Corp ABC Corp
Cash $50,000 $50,000
Accounts Receivables 100,000 200,000
Inventory 50,000 100,000
Current Assets 200,000 350,000
Fixed Assets 200,000 300,000
Other Non-current Assets 50,000 75,000
Non-Current Assets 250,000 375,000
Total Assets $450,000 $725,000
Accounts Payables $100,000 $100,000
Other Current Liabilities 50,000 100,000
Current Liabilities 150,000 200,000
Long-term Debt 100,000 225,000
Total Liabilities 250,000 425,000
Capital 200,000 300,000
Total Liabilities and Equity $450,000 $725,000
Income Statement
Stanton Corp ABC Corp
Sales Revenue $200,000 $300,000
COGS 100,000 150,000
Gross Profit 100,000 150,000
Selling and Administrative Expenses 30,000 50,000
Depreciation Expenses 10,000 10,000
EBIT 60,000 90,000
Interest Expense 10,000 20,000
Earnings Before Tax 50,000 70,000
Taxes 20,000 28,000
Earnings After Tax 30,000 42,000
(1) Current Ratio
(2) Quick Ratio
(3) Cash Ratio
(4) Net Profit Margin
(5) Operating Profit Margin
(6) Basic Earning Power
(7) ROE
(8) ROA
(9) Inventory Turnover Ratio
(10) DSO
(11) Fixed Assets Turnover Ratio
(12) Total Assets Turnover Ratio
(13) Debt Ratio
(14) Debt to Equity Ratio
(15) Liabilities-to-Assets Ratio
(16) Times Interest Earned Ratio
(17) Explain your decision on the investment based on the ratio analysis above in DETAIL.
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