Water Way Company wants to invest some of its excess cash in trading secures and is considering to investments, The Water Company (WC) and Zone Lite Vests (LV). The income statement, twaron snoet other data for both companies follow for 2019 and 2018, as well as selected data for 2017: im Click the icon to view the data) Read the regiments Requirement 1. Compute each ratio for both companies for 2019 and 2018. Assume al sales are credit as Roundation to two decimal places a. Current ratio Begin by selecting the correct form Current ratio Zone Life Vests The Water Company Comparative Financial Statements Years Ended December 31, 2019 2018 2017 Comparative Financial Statements Years Ended December 31, 2019 2018 2017 $ Income Statement Net Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses Operating Income Interest Expense Income before Income Tax Income Tax Expense Net Income 430,642 $ 425,060 258,817 256,532 171,825 168,528 153,770 151,644 18,055 16,884 885 790 $ 410,120 $ 383,350 299,910 280,780 110,210 102,570 78,270 70,490 31.940 2,760 32,080 2,990 17,170 5,115 16,094 4,850 11,244 29,180 8,720 29,090 8,660 $ 12.055 $ 20,460 $ 20,430 Balance Sheet nd the Print Print Done e. 1. Using the financial statements given, compute the following ratios for both companies for 2019 and 2018. Assume all sales are credit sales. Round all ratios to two decimal places. a. Current ratio b. Cash ratio c. Inventory turnover d. Accounts receivable turnover Gross profit percentage f. Debt ratio g. Debt to equity ratio h. Profit margin ratio i. Asset turnover ratio j. Rate of return on common stockholders' equity k. Earnings per share Pricelearnings ratio m. Dividend yield Dividend payout 2. Compare the companies' performance for 2019 and 2018. Make a recommendation to Water Way Company about investing in these companies. Which company would be a better investment, The Water Company or Zone Life Vests? Base your answer on ability to pay current liabilities, ability to sell merchandise and collect receivables, ability to pay long-term debt, profitability, and attractiveness as an investment. n. - Data Table $ $ 68,510 $ 36,400 44,730 44,110 70,024 44.470 $ 66,390 17,006 65,035 $ 39,800 68,590 25,055 55,030 38,690 $ 65,240 37,780 76,330 59,970 79,910 16,230 Balance Sheet Assets Cash and Cash Equivalents Accounts Receivable Merchandise Inventory Other Current Assets Total Current Assets Long-term Assets Total Assets Liabilities Current Liabilities Long-term Liabilities Total Liabilities Stockholders' Equity Common Stock 209,380 90,498 198,480 116,800 197,890 90,148 288,038 S $ 276,780 196,740 116,890 313,630 $ 299,878 $ 315,280 $ 310,470 $ 69,520 $ 31,650 90,870 S 96,360 60,290 29,970 90,260 90,020 105,950 195,970 101,170 187,230 72,790 125,918 80.800 116.978 111,380 16,670 102,420 15,240 Retained Earnings WAAR MAA AN > 299,8785 288,038 $ 276,780 > 375,280 373,630 310,47 Total Assets Liabilities Current Liabilities $ $ 69,520 $ 31,650 60,290 29,970 90,870 $ 96,360 90,020 105,950 195,970 101,170 90,260 187,230 Long-term Liabilities Total Liabilities Stockholders' Equity Common Stock Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity 72,790 125,918 198,778 80,800 116,978 197.778 111,380 16,670 102,420 15,240 197,630 128,050 117,660 103,810 299,878 $ 288,038 $315,280 S 313,630 $ 21.02 $ 33.40 $ 51.56 Other Data Market price per share Annual dividend per share Weighted average number of shares outstanding 45.92 $ 0.51 0.39 0.38 0.42 8.900 7,400 8,900 7,400
