The current year financial statements for Blue Water Company and Prime Fish Company are presented below. Blue Water Prime Fish Balance sheet: Cash $ 41,700 41,500 95,500 150,500 84,700 $ 413,900 $ 69,900 152,900 $ 20,300 33, 100 44,200 409,400 312,000 $ 819,000 $ 59,500 61,400 519,000 106, 700 72,400 $ 819,000 Accounts receivable (net) Inventory Property & equipment (net) Other assets Total assets Current liabilities Long-term debt (interest rate: 15%) Capital stock ($10 par value) Additional paid-in capital Retained earnings Total liabilities and stockholders' equity Income statement: Sales revenue (1/2 on credit) Cost of goods sold Operating expenses Net income Other data: Per share stock price at end of current year Average income tax rate Dividends declared and paid in current year 95,500 29, 700 65,900 $ 413,900 $ 436,500 (237,500) (162, 400) $ 36,600 $ 795,000 (400, 700) (311,700) $ 82,600 $ 22.7 45% 33,700 $ 22 458 $ 151,500 $ 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. Ratio BLUE WATER COMPANY PRIME FISH COMPANY Profitability ratios: 1. Return on equity % % 2. Return on assets % % 3. % % 4. % % Gross profit percentage Net profit margin Earnings per share Quality of income 5. 6. Asset turnover ratios: 7. Total asset turnover 8. Fixed asset turnover 9. Receivable turnover 10. Inventory turnover Liquidity ratios: 11. Current ratio 12. Quick ratio 13. Cash ratio Solvency ratios: 14. Times interest earned ratio 15. Cash coverage ratio Debt/equity ratio 16. Market ratios: 17. Price/earnings ratio 18. Dividend yield ratio % %