Selected data from the financial statements of ABC Co. and NY Products for the year just ended follow. Assume that for both companies dividends declared were equal in amount to net earnings during the year and therefore stockholders' equity did not change. The two companies are in the same line of business.

ABC Co.Brazil NY Products

Total liabilities $200,000$100,000

Total assets 800,000400,000

Sales (all on credit) 1,800,0001,290,000

Average inventory 240,000140,000

Average receivables 200,000100,000

Gross profit as a percentage of sales 40%30%

Operating expenses as a percentage of sales 36%25%

Net income as a percentage of sales 3%5%

a.Compute the net income for each company.

b.Compute the net income as a percentage of stockholders' equityfor each company.

c.Compute the accounts receivable turnoverfor each company.

d.Compute the inventory turnoverfor each company.

e.Which company is in a stronger financial position?