Thor Company				Gunnar Company
Balance Sheet
Cash	$	36,000			$	33,000
Accounts Receivable, Net		78,000				29,000
Inventory		156,000				32,000
Equipment, Net		772,000				194,000
Other Assets		197,000				69,400
Total Assets	$	1,239,000			$	357,400
Current Liabilities	$	170,000			$	20,000
Note Payable (long-term) (12% interest rate)		268,000				68,000
Common Stock (par $20)		673,000				253,000
Additional Paid-in Capital		71,000				5,800
Retained Earnings		57,000				10,600
Total Liabilities and Stockholders Equity	$	1,239,000			$	357,400
Income Statement
Sales Revenue	$	1,123,000			$	339,000
Cost of Goods Sold		673,000				181,000
Other Expenses		337,000				115,000
Net Income	$	113,000			$	43,000
Other Data
Per share price at end of year	$	12.00			$	30.00
Selected Data from Previous Year
Accounts Receivable, Net	$	66,800			$	28,200
Inventory		134,000				46,600
Equipment, Net		772,000				194,000
Note Payable (long-term) (12% interest rate)		268,000				68,000
Total Stockholders Equity		801,000				269,400

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. Thor Company wants to borrow $106,000 and Gunnar Company is asking for $37,000. The loans will be for a two-year period. Neither company issued stock in the current year. Assume the end-of-year total assets and net equipment balances approximate the years average and all sales are on account.

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Thor Company Gunnar Company 12. 10.06% 40.07 % 12.68% 46.61% % $ 3.36 3.57 Ratio Tests of Profitability: 1. Net Profit Margin 2. Gross Profit Percentage 3. Fixed Asset Turnover 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 Ratio days days days days