. Th' t t: 100 Question 1 of 1 -.-..:.s.::5....:__.p10 Data table The Water Company Very Life Vests Comparative Financial Statements Comparative Financial Statements Years Ended December 31, Years Ended December 31, 2025 2024 2023 2025 2024 2023 Income Statement Net Sales Revenue $ 430,146 $ 425,680 410,290 $ 383,770 Cost of Goods Sold 2531977 256.145 299,730 280,450 Gross Profit 171,169 169,535 110,510 103,320 Operating Expenses 153170 151.362 73.050 70.330 Operating Income 17,399 18,173 32,460 32,940 Interest Expense 870 795 Income before Income Tax 16,529 17,378 29,690 30,020 Income Tax Expense 5'159 11.370 $ 12.688 20,910 $ 21,400 Net Income Balance Sheet Assets Cash and Cash Equivalents $ 68,340 $ 70,650 65,749 $ 54,810 Accounts Receivable 44,730 44,460 39,850 38,600 Merchandise Inventory 79,910 66,380 68,600 65,290 Other Current Assets 16'420 161310 243'\" 33.050 Total Current Assets 209,400 197,800 198,500 196,760 Longterm Assets 90.478 90.760 116,770 116,528 Assets Cash and Cash Equivalents Accounts Receivable Merchandise Inventory Other Current Assets Total Current Assets Long-term Assets Total Assets Liabilities Current Liabilities Longterm Liabilities Total Liabilities Stockholders' Equity Common Stock Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity Other Data Market price per share Annual dividend per share Weighted average number of shares outstanding 68,340 $ 44,730 79,910 16,420 209,400 90,478 69,500 $ 31,630 101,130 72,820 125,928 198,748 70,650 44,460 $ 66,380 16,310 1 97, 800 90, 760 $ 299,878 $ 288,560 80,840 117,490 198,330 $ 299,878 $ 288,560 276,890 197,670 187,180 65,749 $ 39,850 68,600 24,301 198,500 116,770 90,660 $ 96,320 111,500 16,590 128,090 54,810 36,600 $ 65,290 38,060 196,760 116,528 315,270 $ 313,288 $ 90,040 105,920 195,960 102,470 14,858 117,328 315,270 $ 313,288 36,420 60,000 310,250 103,870 Wicked Wild Company wants to invest some of its excess cash in trading securities and is considering two investments, The Water Company (WC) and Very Life Vests (VLV). The income statement, balance sheet, and other data for both Requirement 1. Compute each ratio for both companies for 2025 and 2024. Assume all sales are credit sales. Round all ratios to two decimal places. a. Current ratio Begin by selecting the correct formula. Current ratio = Total cunent assets + Total cunent liabilities . ' Now, compute the ratio for both companies for both years. (Round your answers to two decimal places, X.XX.) Ratio Year WC VLV Current 2025 | 301 2.13 Current 2024 3.28 2.18 b. Cash ratio Begin by selecting the correct formula. Cash ratio = (Cash + Cash equivalents) + Total current liabilities ' Now, compute the ratio for both companies for both years. (Round your answers to two decimal places, X.XX.) Ratio Year WC VLV Cash 2025 | 0.99 0.72 Cash 2024 | 1.18 0.62 0. Inventory turnover Begin by selecting the correct formula. Inventory turnover = Cost of goods sold + Average merchandise inventory 7 Now, compute the ratio for both companies for both years. (Round your answers to two decimal places. X.XX.) Ratio Year WC VLV Inventory turnover 2025 3.53 4.48 Inventory turnover 2024 | 3.59 4.48 | d. Accounts receivable (AR) turnover chked Wild Company wants to invest some of its excess cash in trading securitles and is considering two investments, The Water Company (WC) and Very Life Vests (VLV). The income statement, balance sheet, and other data for both (Tx d. Accounts receivable (AR) turnover Begin by selecting the correct formula. AR turnover = Net credit sales + Average net accounts receivable v New, compute the ratio for both companies for both years. (Round your answers to two decimal places, X.XX.) Ratio Year WC VLV AR turnover 2025 9.67 10.46 AR turnover 2024 9.61 10.23 0. Gross profit percentage Begin by selecting the correct formula. Gross prot % = Gross Prot + Net sales revenue ' Now, compute the ratio for both companies for both years. (Round your answers to two decimal placesthe nearest hundredth percent, X,XX%.) Ratio Year WC VLV Gross prot % 2025 3979 % 2693 % Gross prot % 2024 39-33 % 26,92 0/\" f. Debt ratio Begin by selecting the correct formula. Debt ratio = Total liabilities + Total asset v Now, compute the ratio for both companies for both years. (Enter your answers as a percentage to two decimal placesthe nearest hundredth percent, X.XX%.) Ratio Year We VLV Debt 2025 3372 % 59.37 % Debt 2024 31.27 % 62.55 % 9. Debt to equity ratio Begin by selecting the correct formula. Wicked Wild Company wants to invest some of its excess cash in trading securities and is considering two investments, The Water Company (WC) and Very Life Vests (VLV). The income statement, balance sheet, and other data for both 9. Debt to equity ratio Begin by selecting the correct formula. Debt to equity ratio = Total liabilities - Total equity n Now, compute the ratio for both companies for both years. (Enter your answers as a rate and not as a percentage. Round your answers to two decimal places, X.XX.) Ratio Year WC VLV Debt to equity 2025 0.51 | 1.46 | Debt to equity 2024 0.45 | 1.67 | h. Prot margin ratio Begin by selecting the correct formula. Profit margin ratio = Net income + Net sales v Now, compute the ratio for both companies for both years. (Enter your answers as a percentage to two decimal placesthe nearest hundredth percent, X.XX%.) Ratio Year WC VLV Prot margin 2025 2.64 % 5.10 % Prot margin 2024 2-98 % 5.58 % i. Asset turnover ratio Begin by selecting the correct formula. Asset turnover ratio = Net sales + Average total assets n Now, compute the ratio for both companies for both years. (Round your answers to two decimal places, X.XX.) Ratio Year WC VLV Asset turnover 2025 1-53 I 1 .31 Asset turnover 2024 1.51 | 1.23 . Rate of retum on common stockholders' equity (ROR on common SE) Begin by selecting the correct formula. nnn nn mmmun El: = ( Net income - Preferred dividends) + Averaoe common stockholders' eouitv iv Wicked Vlld Company wants to invest some of its excess cash in trading securities and is considering two investments, The Water Company (WC) and Very Life Vests (VLV). The income statement. balance sheet, and other data for both (\\ . Rate of return on common stockholders' equity (ROR on common SE) Begin by selecting the correct formula. ROR on common SE = (Net income - Preferred dividends) + Average common stockholders' equity v Now, compute the ratio for both companies for both years. (Enter your answers as a percentage to two decimal placesthe nearest hundredth percent, X.XX%.) Ratio Year WC VLV ROR on common SE 2025 5-73 % 6'65 \"/0 ROR on common SE 2024 6-41 I% 6-86 % k. Earnings per share Begin by selecting the correct formula. Earnings per share = (Net income - Preferred dividends) + Weighted average number of common share outstanding v Now, compute the iatio for both companies for both years. (Round your answers to two decimal places, X.XX.) Ratio Year WC VLV Earnings per share 2025 1'29 2.38 Earnings per share 2024 1'63 I 2.74 I. Price/earnings ratio Begin by selecting the correct formula. Price/earnings rang = Market price per share of common stock + Earnings per share v Now, compute the iatio for both companies for both years. (Round your answers to two decimal places, X.XX.) Ratio Year WC VLV Priceleamings 2025 16.08 1956 Priceleamings 2024 20.70 18.75 m. Dividend yield Begin by selecting the correct formula. Wicked Wild Company wants to invest some of its excess cash in trading securities and is considering two investments, The Water Company (WC) and Very Life Vests (VLV). The income statement, balance sheet, and other data for both LIVIUCHIU VIGIL CULT n. Dividend payout Begin by selecting the correct formula. Dividend payout Annual dividend per share + Earnings per share Now, compute the ratio for both companies for both years. (Enter your answers as a percentage to two decimal places-the nearest hundredth percent, X.XX%.) Ratio Year WC VLV Dividend payout 2025 % % Dividend payout 2024 % % Requirement 2. Compare the companies' performance for 2025 and 2024. Make a recommendation to Wicked Wild Company about investing in these companies. Which company would be a better investment, The Water Company or Very Life Vests? Base your answer on ability to pay current liabilities, ability to sell merchandise and collect receivables, ability to pay long-term debt, profitability, and attractiveness as an investment. Start by comparing each company's ability to pay current liabilities. Select the appropriate ratios and identify which company has the stronger ratio. Review the ratios you calculated in Requirement 1. Ability to pay current liabilities Potential investment company Ratios with stronger ratio Next, compare each company's ability to sell merchandise inventory and collect receivables. Select the appropriate ratios and identify which company has the stronger ratio. Review the ratios you calculated in Requirement 1. Ability to sell merchandise inventory and collect receivables Potential investment company Ratios with stronger ratio Compare each company's ability to nav long-term debt. Select the anpropriate ratios and identify which company has the stronger ratio.Wicked Wild Company wants to invest some of its excess cash in trading securities and is considering two investments, The Water Company (WC) and Very Life Vests (VLV). The income statement, balance sheet, and other data for both Potential investment company Ratios with stronger ratio Compare each company's ability to pay long-term debt. Select the appropriate ratios and identify which company has the stronger ratio. Review the ratios you calculated in Requirement 1. Ability to pay long-term debt Potential investment company Ratios with stronger ratio Compare the potential investment companies in terms of profitability. Select the appropriate ratios and identify which company has the stronger ratio. Review the ratios you calculated in Requirement 1. Profitability Potential investment company Ratios with stronger ratio Now compare each potential investment company's stock as an investment. Select the appropriate ratios and identify which company has the stronger ratio. (If one of the investment company's ratios is stronger than the other in one year but weaker in the next, base the comparison on the 2025 ratios.) Review the ratios you calculated in Requirement 1. Stock as an investment Potential investment company