Selected financial data for Changretta Inc. and Solomon Ltd. (in $ thousands) are presented below. Changretta Inc. Solomon Ltd. Statement of Comprehensive Income (Loss) $36,755 $36,333 18,930 26,136 17,825 10,197 17.110 8,076 Total revenue Cost of sales Gross profit Operating expenses Profit from operations Interest expense (revenue) Other expenses Other non-operating income Profit before income tax Income tax expense 715 2,121 (36) 535 153 351 436 949 2,022 325 627 Profit $624 $1,395 Changretta Inc. Solomon Ltd. Balance Sheet Current assets $9,680 $10,838 Non-current assets 38,487 34,096 Total assets $48,167 $44,934 Current liabilities $4,958 $6,335 Non-current liabilities 4,766 4,217 Total liabilities 9.724 10,552 Shareholders' equity 38,443 34,382 Total liabilities and shareholders' equity $48,167 $44,934 Additional information: $1,413 $6,179 Average accounts receivable Average inventories Average total assets 3,398 3,676 45,412 45,651 Average total shareholders' equity 34,200 33,447 (b) Compare the liquidity, solvency, and profitability of the two companies. Changretta Inc. Solomon Ltd. 2.0 1.7 Liquidity Ratios 1. Current ratio Receivables turnover 3. Inventory turnover 4. Operating cycle 2. 26.0 times 5.9 times 5.6 times 7.1 times 79.2 days 113.3 days Solvency Ratios 5. 20.2 % 23.5 % Debt to total assets Interest coverage 6. 0 times 4.8 times Profitability Ratios 7. 48.5 % 28.1 % Gross profit margin Profit margin 8. 1.7 % 3.8 % 9. Asset turnover 0.8 times 0.8 times 10. Return on assets 1.4 % 3.1 % 11. Return on equity 1.8 % 4.2 %