Read carefully the following financial information before planning to write the Report

Below is the summary information from the financial statements of two companies competing in the same industry:

Income Statement for the year ended 30 June 2022

	Bayside Company	Gamba Company
	$000	$000
Sales	393,600	667,500
Cost of goods sold	290,600	480,000
Gross profit	103,000	187,500
Operating expenses	57,550	101,200
Interest expense	5,900	12,300
Net profit before tax	39,550	74,000
Income tax expense	5,700	12,300
Net profit after tax	33,850	61,700
Basic earnings per share	$1.27	$2.19

Balance Sheet as at 30 June 2022

	Bayside Company	Gamba Company
Assets	$000	$000
Cash	20,000	36,500
Accounts receivable	77,100	70,500
Notes receivable (trade & current)	11,600	9,000
Merchandise inventory	86,800	82,000
Prepaid expenses	9,700	10,100
Property, plant and equipment	176,900	252,300
Total Assets	382,100	460,400
Liabilities and Equity
Current liabilities	90,500	97,000
Notes payable (long-term)	93,000	93,300
Share capital	133,000	141,000
Retained earnings	65,600	129,100
Total Liabilities and Equity	382,100	460,400

Beginning-of-year balances (1 July 2021):
Accounts receivable	72,200	73,300
Notes receivable (trade & current)	0	0
Merchandise inventory	105,100	80,500
Total assets	383,400	443,000
Share capital	133,000	141,000
Retained earnings	49,100	109,700

Additional information:
Dividend paid (per share)	$1.50	$1.80
Current market price (per share)	$25	$30

Balance Sheet as at 30 June 2022

	Bayside Company	Gamba Company
Assets	$000	$000
Cash	20,000	36,500
Accounts receivable	77,100	70,500
Notes receivable (trade & current)	11,600	9,000
Merchandise inventory	86,800	82,000
Prepaid expenses	9,700	10,100
Property, plant and equipment	176,900	252,300
Total Assets	382,100	460,400
Liabilities and Equity
Current liabilities	90,500	97,000
Notes payable (long-term)	93,000	93,300
Share capital	133,000	141,000
Retained earnings	65,600	129,100
Total Liabilities and Equity	382,100	460,400

Beginning-of-year balances (1 July 2021):
Accounts receivable	72,200	73,300
Notes receivable (trade & current)	0	0
Merchandise inventory	105,100	80,500
Total assets	383,400	443,000
Share capital	133,000	141,000
Retained earnings	49,100	109,700

Additional information:
Dividend paid (per share)	$1.50	$1.80
Current market price (per share)	$25	$30

1. Based on the ratio analysis in (2) above, evaluate the financial health of both companies in respect of their liquidity, solvency, efficiency, profitability, and market perspective.

1. Based on your evaluation in (3) above, identify which companys shares you would recommend as the better investment. Provide explanations.