The financial statements for Royale and Cavalier companies are summarized here:

Royale Company Cavalier Company

Balance Sheet

Cash $ $31,000$ $ $51,000$

Accounts Receivable, Net $61,00022,000$

Inventory $122,00037,000$

Equipment, Net $562,000172,000$

Other Assets $146,00052,000$

Total Assets $ $922,000$ $ $334,000$

Current Liabilities $ $132,000$ $ $27,000$

Notes Payable $($long$-$term$)202,00067,000$

Common Stock $($par $$20)486,000216,000$

Additional Paid$-$In Capital $56,00010,000$

Retained Earnings $46,00014,000$

Total Liabilities and Stockholders$$ Equity $ $922,000$ $ $334,000$

Income Statement

Sales Revenue $ $818,000$ $ $298,000$

Cost of Goods Sold $486,000156,000$

Other Expenses $246,000101,000$

Net Income $ $86,000$ $ $41,000$

Other Data

Per share price at end of year $ $18\mathrm{.}00$ $ $15\mathrm{.}00$

Selected Data from Previous Year

Accounts Receivable, Net $ $53,000$ $ $20,000$

Notes Payable $($long$-$term$)202,00067,000$

Equipment, Net $562,000172,000$

Inventory $101,00044,000$

Total Stockholders' Equity $588,000240,000$

These two companies are in the same business and state but different cities. Each company has been in operation for about $10$ years. Both companies received an unqualified audit opinion on the financial statements. Royale Company wants to borrow $$81,000$ cash, and Cavalier Company is asking for $$36,000.$ The loans will be for a two$-$year period. Both companies estimate bad debts based on an aging analysis, but Cavalier has estimated slightly higher uncollectible rates than Royale. Neither company issued stock in the current year. Assume the end$-$of$-$year total assets and net equipment balances approximate the year$$s average and all sales are on account.

Required:

Calculate the following ratios.

Note: Use $365$ days in a year. Round your intermediate calculations and final answers to $2$ decimal places. Ratio Royale Company Cavalier Company

Tests of Profitability:

$1.$ Net Profit Margin $10\mathrm{.}51\%13\mathrm{.}76\%$

$2.$ Gross Profit Percentage $40\mathrm{.}59\%\%$

$3.$ Fixed Asset Turnover

$4.$ Return on Equity $\%\%$

$5.$ Earnings per Share

$6.$ Price$/$Earnings Ratio

Tests of Liquidity:

$7.$ Receivables Turnover

$7.$ Days to Collect

$8.$ Inventory Turnover

$8.$ Days to Sell

$9.$ Current Ratio

Tests of Solvency:

$10.$ Debt$-$to$-$Assets