Required
1) Calculate Ratios in yellow
2) Comment on significant differences between the
companies, as well as on possible causes

XYC Balance Sheet Company ABC XYC YOU ARE COMPARING 2 DIFFERENT COMPANIES THE $S$$ OF ONE COMPANY HAVE NOTHING TO DO WITH THE DOLLARS OF THE OTHER COMPANY THAT'S WHY WE USE RATIOS. WE COMPARE THE RATIOS, DO NOT TRY TO COMPARE THE DOLLARS. Income Statement Company ABC Sales 143,000 Cost of Goods Sold 85,800 Gross Profit 57.200 Gross Margin Incorp Incorp 380,000 203,000 177,000 Assets Cash Accounts Receivable Inventory Prepaids Total Current Assets 16,000 12,000 14,500 3,400 45,900 10,000 38,000 42.000 5,000 95,000 SG&A Operating Income Interest Income before Tax Income Tax 23,000 34,200 2,000 32,200 8,050 24,150 98,000 79,000 3,000 76,000 17,000 59,000 PP&E, net of Depreciation Total Assets 230,000 275,900 510,000 605,000 Net Income Profit Margin Liabilities Accounts Payable Accrued Expenses Total Current Liabilities 14,230 2,300 16,530 38,000 15,000 53,000 Current ratio Notes Payable Total Liabilities 113,370 129,900 162,000 215,000 Average Collection Period Number of Days Sales in Inventory Stockholders Eauity Common Stock Retained Earnings Total Stockholders Equity Dupont Net Income/Sales Sales/Assets Assets/Equity Profitability Effidency 56,000 90,000 146,000 90,000 300,000 390,000 Leveringe Retum on Equity Total Liabilities & Stockholders Equity 275,900 605,000 rule of thumb 15% to 25% Debt Ratio Debt to Equity Effective Tax Rate XYC Balance Sheet Company ABC XYC YOU ARE COMPARING 2 DIFFERENT COMPANIES THE $S$$ OF ONE COMPANY HAVE NOTHING TO DO WITH THE DOLLARS OF THE OTHER COMPANY THAT'S WHY WE USE RATIOS. WE COMPARE THE RATIOS, DO NOT TRY TO COMPARE THE DOLLARS. Income Statement Company ABC Sales 143,000 Cost of Goods Sold 85,800 Gross Profit 57.200 Gross Margin Incorp Incorp 380,000 203,000 177,000 Assets Cash Accounts Receivable Inventory Prepaids Total Current Assets 16,000 12,000 14,500 3,400 45,900 10,000 38,000 42.000 5,000 95,000 SG&A Operating Income Interest Income before Tax Income Tax 23,000 34,200 2,000 32,200 8,050 24,150 98,000 79,000 3,000 76,000 17,000 59,000 PP&E, net of Depreciation Total Assets 230,000 275,900 510,000 605,000 Net Income Profit Margin Liabilities Accounts Payable Accrued Expenses Total Current Liabilities 14,230 2,300 16,530 38,000 15,000 53,000 Current ratio Notes Payable Total Liabilities 113,370 129,900 162,000 215,000 Average Collection Period Number of Days Sales in Inventory Stockholders Eauity Common Stock Retained Earnings Total Stockholders Equity Dupont Net Income/Sales Sales/Assets Assets/Equity Profitability Effidency 56,000 90,000 146,000 90,000 300,000 390,000 Leveringe Retum on Equity Total Liabilities & Stockholders Equity 275,900 605,000 rule of thumb 15% to 25% Debt Ratio Debt to Equity Effective Tax Rate