Please describe the circumstances of the following case study and recommend which company to purchase. Explain your approach to the problem, perform relevant calculations and analyses, and justify your recommendation. Ensure your work and conclusions are thoroughly supported.

Case Study:

You work in the mergers and acquisitions department of a large conglomerate who is looking to invest in a retail business. Two companies, Fashion Forward and Dream Designs, are the final two options being considered. You have the most recent availableincome statements and two years of balance sheetsfor each company.

Compute the following ratios for each company:

• Profit Margin Ratio
• Return on Assets
• Current Ratio
• Quick Ratio
• AR Turnover Ratio
• Average Collection Period
• Inventory Turnover Ratio
• Average Sales Period
• Debt to Equity Ratio
• For this assignment:Compute all required amounts and explain how the computations were performed
• Evaluate the results for each company and explain what each ratio means
• Compare and contrast the companies.
• Based on your analysis:
• recommend which company the organization should pursue
• Thoroughly support your conclusion, including what other factors should be considered
• Be specific.

A C D E F BUS 5110 Written Assignment 7 Financials Income Statements Fashion Forward Dream Designs 31/12/2018 31/12/2018 Revenue Credit Sales 2,000.000 4.320,000 Non-Credit Sales 500,000 1.080,000 Total Revenue 2,500,000 5.400,000 10 Cost of Sales 1,400.000 3.250.000 11 Gross Profit 1,100,000 2.150,000 12 13 Operating Expenses 14 Research and Development 50.000 200,000 15 Selling, General, and Administrative 750,000 1.800,000 18 Total Operating Expenses 800,000 1.800.000 17 18 Earnings Before Interest and Taxes 300.000 350,000 19 20 Interest Expense (18,000) (50,000) 21 Income Before Tax 282,000 300,000 22 Income Tax Expense (145,500) (87.500) 23 Net Income 130,500 212.500 24 25 27 28 29 30 31 32 33 34 35G H K Balance Sheets Fashion Forward Fashion Forward Dream Designs Dream Designs 31/12/2018 31/12/2017 31/12 2018 31/12 2017 Current Assets Cash and Cash Equivalents 950.000 980.000 1.710.000 1.705.000 Accounts Receivable 200.000 150,000 250,000 275,000 Inventory 112.000 105.000 200,000 215,000 Other Current Assets 35,000 50.000 120.900 100.000 Total Current Assets 1,297,000 1,285.000 2 280,500 2 295,000 Property, Plant and Equipment 835.000 700.000 850.000 900.000 Goodwill 750,000 750,000 1.150,000 1.150.000 Other Long-Term Assets 65,000 70.000 100.750 105.000 Total Assets 2,747.000 2,805,000 4,381,250 4,450,000 Current Liabilities Accounts Payable 545.000 535.000 845.750 875,000 Short-Term Debt 25.000 50.000 60.000 Other Current Liabilities 600.000 510,000 730,000 740.000 Total Current Liabilities 1,170,000 1,045,000 1.625,750 1,675,000 Long-Term Debt 75,000 120,500 130,000 Other Long-Term Liabilities 100.000 75.000 155,000 185,000 Total Liabilities 1,345,000 1.120,000 1,901 250 1,970,000 Stockholders Equity Common Stoo 500.000 775.000 749.500 942.750 Preferred Stock 150,000 294.500 390.000 409 250 Retained Earnings 752,000 815.500 1.340,500 1.128.000 Total Stockholders Equity 1,402,000 1,685,000 2,480,000 2 480,000 Total Liabilities and Stockholders Equity 2,747,000 2 805.000 4,381 250 4,450,000