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

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.

Armstrong Company Blair Company Balance Sheet Cash Accounts Receivable, Net Inventory Equipment, Net Other Assets Total Assets Current Liabilities Note Payable (long-term) Total Liabilities Common Stock (par $10) Additional Paid-in Capital Retained Earnings Total Liabilities and Stockholders' Equity Income Statement Sales Revenue Cost of Goods Sold Other Expenses Net Income Other Data Estimated value of each share at end of year Selected Data from Previous Year Accounts Receivable, Net Inventory Equipment, Net Note Payable (long-term) Total Stockholders' Equity $ 26,000 31,000 82,000 162,000 36,000 $337,000 $ 82,000 42,000 124,000 141,000 21,000 51,000 $337,000 $ 13,000 21,000 22,000 282,000 399,000 $ 737,000 $ 32,000 352,000 384,000 191,000 101,000 61,000 $ 737,000 $423,000 236,000 151,000 $ 36,000 $783,000 396,000 306,000 $ 81,000 $ 19 $ 26 $ 11,000 83,000 162,000 42,000 222,000 $ 29,000 36,000 282,000 61,000 431,000 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. Do not round intermediate calculations and round 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