Question
The current year financial statements for Blue Water Company and Prime Fish Company are presented below. Blue Water Prime Fish Balance sheet Cash $ 41,100
The current year financial statements for Blue Water Company and Prime Fish Company are presented below.
Blue Water | Prime Fish | |
---|---|---|
Balance sheet | ||
Cash | $ 41,100 | $ 20,900 |
Accounts receivable (net) | 38,500 | 31,300 |
Inventory | 98,500 | 40,600 |
Property & equipment (net) | 141,500 | 402,200 |
Other assets | 84,100 | 306,000 |
Total assets | $ 403,700 | $ 801,000 |
Current liabilities | $ 98,500 | $ 50,500 |
Long-term debt (interest rate: 15%) | 65,700 | 60,200 |
Capital stock ($10 par value) | 148,700 | 513,000 |
Additional paid-in capital | 29,100 | 106,100 |
Retained earnings | 61,700 | 71,200 |
Total liabilities and stockholders equity | $ 403,700 | $ 801,000 |
Income statement | ||
Sales revenue (1/2 on credit) | $ 445,500 | $ 801,000 |
Cost of goods sold | (240,500) | (400,100) |
Operating expenses | (161,200) | (311,100) |
Net income | $ 43,800 | $ 89,800 |
Other data | ||
Per share stock price at end of current year | $ 22.1 | $ 16 |
Average income tax rate | 45% | 45% |
Dividends declared and paid in current year | $ 33,100 | $ 148,500 |
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. Using year-end balances for all ratios, compute the following ratios:
Note: 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). Profitability ratios: 1. Return on equity ratio 2. Return on asset ratio 3. Gross profit margin ratio 4. Net profit margin ratio 5. Earnings per share ratio Asset Turnover Ratio 6.Total asset turnover ratio 7.Fixed asset turnover ratio 8.Receivable turnover ratio 9.Inventory turnover ratio Liquidity ratios 10. Current Ratio 11. Quick Ratio 12. Cash Ratio
Solvency Ratios: 13. Debt to equity ratio Market ratios: 14. price earnings ratio 15. Dividend yield ratio
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started