The current year financial statements for Blue Water Company and Prime Fish Company are presented below.

	Blue Water				Prime Fish
Balance sheet:
Cash	$	41,300			$	20,700
Accounts receivable (net)		39,500				31,900
Inventory		97,500				41,800
Property & equipment (net)		144,500				404,600
Other assets		84,300				308,000
Total assets	$	407,100			$	807,000
Current liabilities	$	97,500			$	53,500
Long-term debt (interest rate: 15%)		67,100				60,600
Capital stock ($10 par value)		150,100				515,000
Additional paid-in capital		29,300				106,300
Retained earnings		63,100				71,600
Total liabilities and stockholders equity	$	407,100			$	807,000
Income statement:
Sales revenue (1/2 on credit)	$	442,500			$	799,000
Cost of goods sold		(239,500	)			(400,300	)
Operating expenses		(161,600	)			(311,300	)
Net income	$	41,400			$	87,400
Other data:
Per share stock price at end of current year	$	22.3			$	18
Average income tax rate		45	%			45	%
Dividends declared and paid in current year	$	33,300			$	149,500

Both companies are in the fish catching and manufacturing business. 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. Blue Water is more conservative, and as its president has said, We avoid what we consider to be undue risk. Neither company is publicly held.

Required:

1. Complete a schedule that reflects a ratio analysis of each company. (Round your intermediate calculations and final answers to 2 decimal places. Enter percentage answers rounded to 2 decimal places (i.e. 0.1234 should be entered as 12.34).)

>X 2. 4 5. $ Answer is complete but not entirely correct. Ratio BLUE WATER PRIME FISH COMPANY COMPANY Profitability ratios 1. Return on equity 17.07 % 12.61 % 2. Return on assets 5.59 % 5.95 X % 3. Gross profit percentage 45.88 % 49.90 % 4. Net profit margin 5.14 X % 6.02 X % Earnings per share $ 1.57 X 0.93 x 6. Quality of income 3.90 3.56 X Asset turnover ratios: 7. Total asset turnover 1.08 0.99 8. Fixed asset turnover 3.06 1.97 9. Receivable turnover 5.60 12.50 X 10. Inventory turnover 4.53 19.11 X Liquidity ratios: 11. Current ratio 2.69 X 7.52 x 12. Quick ratio 1.69 X 6.74 X 13. Cash ratio 0.42 0.38 Solvency ratios: 14. Times interest earned ratio 6.96 X 14.94 X 15. Cash coverage ratio 16.06 x 34.25 X 16. Debt/equity ratio 0.27 x 0.08 X Market ratios: 17. Price/earnings ratio 14.76 X 19.35 X 18. Dividend yield ratio 9.94 % 16.12 % B