The financial statements for Armstrong and Blair companies are summarized here:

Armstrong Company Blair Company

Balance Sheet

Cash $ 40,000 $ 27,000

Accounts Receivable, Net 45,000 35,000

Inventory 110,000 50,000

Equipment, Net 190,000 310,000

Other Assets 50,000 413,000

Total Assets $ 435,000 $ 835,000

Current Liabilities $ 110,000 $ 60,000

Note Payable (long-term) 70,000 380,000

Total Liabilities 180,000 440,000

Common Stock (par $10) 155,000 205,000

Additional Paid-in Capital 35,000 115,000

Retained Earnings 65,000 75,000

Total Liabilities and Stockholders Equity $ 435,000 $ 835,000

Income Statement

Sales Revenue $ 465,000 $ 825,000

Cost of Goods Sold 250,000 410,000

Other Expenses 165,000 320,000

Net Income $ 50,000 $ 95,000

Other Data

Estimated value of each share at end of year $ 20 $ 28

Selected Data from Previous Year

Accounts Receivable, Net $ 25,000 $ 43,000

Inventory 97,000 50,000

Equipment, Net 190,000 310,000

Note Payable (long-term) 70,000 75,000

Total Stockholders Equity 236,000 445,000

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. Despite these similarities, the management of each has a different viewpoint in many respects. Blair is more conservative, and as its president said, We avoid what we consider to be undue risk. Both companies use straight-line depreciation, but Blair estimates slightly shorter useful lives than Armstrong. No shares were issued in the current year and neither company is publicly held. Blair Company has an annual audit by a CPA, but Armstrong Company does not. Assume the end-of-year total assets and net equipment balances approximate the years average and all sales are on account.

Required: 1. Calculate the following ratios. TIP: To calculate EPS, use the balance in Common Stock to determine the number of shares outstanding. Common Stock equals the par value per share times the number of shares. (Use 365 days in a year. Round your intermediate calculations and your final answers to 2 decimal places.)

Ratio		Armstrong Company		Blair Company
Tests of Profitability:
1.	Net Profit Margin		%		%
2.	Gross Profit Percentage		%		%
3.	Fixed Asset Turnover
4.	Return on Equity		%		%
5.	Earnings per Share
6.	Price/Earnings Ratio
Tests of Liquidity:
7.	Receivables Turnover
	Days to Collect
8.	Inventory Turnover
	Days to Sell
9.	Current Ratio
Tests of Solvency:
10.	Debt-to-Assets