The 2017 financial statements for Armstrong and Blair companies are summarized below: Armstrong Company Blair Company Statement of Financial Position Cash Accounts receivable (net) Inventory Property, plant, and equipment (net) Other non-current assets $ 35,900 31,000 195,000 162,000 94,000 $ 31,000 39,000 33,500 490,000 326,000 Total assets $ 517,900 $ 919,500 Current liabilities Long-term debt (10%) Share capital Contributed surplus Retained earnings $ 122,500 96,500 168,000 39,000 91,900 $ 48,000 88,000 590,000 129,000 64,500 Total liabilities and shareholders' equity $ 517,900 $ 919,500 Statement of Earnings Sales revenue (1/3 on credit) Cost of sales Expenses (including interest and income tax) $ 540,000 (297,000) (183,600) $ 900,000 (450,000) (342,000) Net earnings $ 59,400 $ 108,000 Selected data from the 2016 statements follows: $29,000 83,000 96,500 $ 49,000 30,000 88,000 Accounts receivable (net) Inventory Long-term debt Other data: Share price at end of 2017 Income tax rate Dividends declared and paid in 2017 Number of common shares during 2017 $ 18 30% $45,000 15,000 $ 15 30% $240,000 50,000 The companies are in the same line of business and are direct competitors in a large metropolitan area. Both have been in business approximately 10 years, and each has had steady growth. The management of each has a different viewpoint in many respects. Blair Company is more conservative, and as its president said, "We avoid what we consider to be undue risk." Neither company is publicly held. Armstrong Company has an annual audit by an independent auditor, but Blair Company does not. Required: 1. Complete a schedule that reflects a ratio analysis of each company. Use ending balances if average balances are not available. (Round intermediate calculations and final answers to 2 decimal places.) Ratio Armstrong Company Blair Company Tests of profitability: Return on equity 13.78 % 19.87 % 11.47 X % 11.75 X % Return on assets Financial leverage percentage Earnings per share 111.37 X % 105.70 X % $ 3.96 per $ 2.16 per share share Profit margin 11.00 % 12.00 % Fixed asset turnover 3.33 times 1.84 times Tests of liquidity: Cash ratio 0.29 0.65 Current ratio 2.14 2.16 Quick ratio 0.55 1.46 Receivables turnover 6.00 times 6.82 times 2.14 times 14.17 times Inventory turnover Tests of solvency: Times-interest-earned ratio Debt-to-equity ratio 9.79 times 18.53 times 73.27 X 17.36 X Market tests: 4.55 6.94 Pricelearnings ratio Dividend yield ratio 16.67 % 32.00 %