You are a bank loan manager and you have had two companys (Arrow and Root) come to your bank requesting a 6-month loan. I'm provided with a Microsoft Excel file that contains the financial statements for 2 companies (Arrow-S and Root-S) and a tab where i have to calculate all ratios (Ratio template for students). I'm also provided with another document asking for conclusions made based on the ratio analysis made.

There are two parts to this assignment:

1. In the Microsoft Excel file on the Ratio template for students tab you will be calculating Liquidity, Solvency, and Profitability ratios for each company, stating what makes a ratio more successful and comparing the results between the two companies to determine which company has stronger results.

-The calculations for Arrow and Root will be completed in columns D and F. Please ensure that you indicate the units for each ratio calculation. For example, if the unit is days, times, :1, record that in columns E and G beside your calculation. Complete all calculations to 2 decimal places. The calculation portion of the assignment must be completed in Microsoft Excel (preferably using linking of cells) and then submitted electronically.

-In column H comment on whether the ratio should be higher or lower to be more successful. Please note when comparing the working capital ratios between companies, the companies need to be considered comparable in size. For the purposes of this assignment, assume Arrow and Root are comparable.

-In column J comment on which company has a better ratio result based on your calculations. (It may be the same depending on your particular version.)

ARROW LTD. STATEMENTS:

ROOT LTD. STATEMENTS:

I need help with filling these out and concluding which is better for each company higher/lower ........and which company is better for the related ratios.

There's also a formula sheet for the ratio analysis formulas please let me know if that is needed. Your help is much appreciated!

ARROW LTD. INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2020 CANADIAN DOLLARS (millions of dollars) * Revenue Sales Revenue Rent Revenue Interest Revenue Other Revenues Total revenues $ 1.295 466 344 442 $ 2,547 Operating expenses Cost of Goods sold Wages expense Salary expense Benefit expense Research and development expense Repairs and maintenance expense Sales and distribution costs expense Depreciation expense - equipment Depreciation expense - vehicles Depreciation expense - furniture Depreciation expense - office building Insurance expense Property taxes expense Food and beverage expense Supplies expense Interest expense Information technology expense Advertising expense Total operating expenses Profit before income tax Income Tax expense Profit 333 295 136 148 57 42 197 25 3 2 4 5 37 96 21 22 11 167 1,601 946 237 709 * Denates all of these sales were made on credit ARROY LTD. STATEMENT OF FINANCIAL POSITION AS AT DECEMBER 31, 2020 CAHADIAN DOLLARS (willions of dollars) ASSETS Current opets Cash Short-term investments Accounts receivable Inventory Spare parts and supplies inventory Prepaid Maintenance Prepaid expenses Total current assets $1,789 548 274 84 84 338 20 $3,137 Investments 123 97 $2,706 213 2,487 Property plant, and equipment Land Office Building Less: Accumulated depreciation Equipment Less: Accumulated depreciation Vehicles Less: Accumulated depreciation Furniture Less: Accumulated depreciation Total property, plant and equipment 1,393 1,698 305 635 209 238 31 426 207 4,610 Intangible assets Trademark Patent Total intangible assets Total Assets 54 25 79 7,949 Liabilities and Shareholders' Equity 318 180 Current Liabilities Accounts payable Accrued liabilities Deferred Revenue Current portion of bank loan and mortgage payable Income Tax payable Total Current Liabilities 423 379 473 1,773 Non-current liabilities Bank loan payable Mortgage Payable Bond payable Total Non-current liabilities 594 349 1,128 2,071 Total Liabilities 3,844 Shareholders' Equity Preferred Shores" Common Shares Retained Earning Total Shareholders' Equity 313 657 3,135 4,105 Total liabilities and shareholders' aquity 7.949 * There were no preferred dividends declared this year. *** The Weighted Average number of common shares outstanding are: The Market price per common share is: 20,000,000 45 ROOT LTD. INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2020 CANADIAN DOLLARS (millions of dollars) $ Revenue Sales Revenue Rent Revenue Interest Revenue Other Revenues Total revenues 1,246 512 287 77 $ 2,122 Operating expenses Cost of Goods sold Wages expense Salary expense Benefit expense Research and development expense Repairs and maintenance expense Sales and distribution costs expense Depreciation expense - equipment Depreciation expense - vehicles Depreciation expense - furniture Depreciation expense - office building Insurance expense Property taxes expense Food and beverage expense Supplies expense Interest expense Information technology expense Advertising expense Total operating expenses Profit before income tax Income Tax expense Profit 351 268 118 133 32 86 174 21 11 6 9 5 59 77 53 77 18 112 3 1,610 512 128 384 * Denotes all of these sales were made on credit ROOT LTD. STATEMENT OF FINANCIAL POSITION AS AT DECEMBER 31, 2020 CANADIAN DOLLARS (millions of dollars) ASSETS $ Current asseto Cash Short-term investments Accounts receivable Inventory Spare parts and supplies inventory Prepaid Maintenance Prepaid expenses Total current assets 1,944 577 375 96 107 268 48 $ $ 3,415 Investments 176 61 ** 2,183 1 Property plant, and equipment Land Office Building Less: Accumulated depreciation Equipment Less: Accumulated depreciation Vehicles Less: Accumulated depreciation Furniture Less: Accumulated depreciation Total property, plant and equipment 1,815 2,983 800 2,318 503 677 146 195 58 531 137 4,727 Intangible assets Trademark Patent Total intangible sota 54 42 96 Total Assets 8,414 Liabilities and Shareholders' Equity Current Liabilities Accounts payable Accrued liabilities Deferred Revenue Current portion of bank loan and mortgage payable Income Tax payable Total Current Liabilities 949 300 403 373 421 2,446 Non-current liabilities Bank loan payable Mortgage Payabla Bond payable Total Non-current liabilities Total Liabilities 580 330 2,421 3,331 5,777 1 ID: Shareholders' Equity Preferred Shares .. Common Shares Retained Earning Total Shareholders' Equity 407 515 1,715 1 2,637 Total liabilities and shareholders' cquity 8,414 "There were no preferred dividends declared this year. ***The Weighted Average number of common shares outstandi 25.000.000 The Market price per common share is : 20 Arrow Root Is higher or lower better? Which company is better? 6 Liquidity Working Capital: Current Assets - Current Liabilities Current Ratio: Current Assets Current Liabilities Il Quick Ratio: Cash + Short-term Investments + Accts Receivable Current Liabilities Receivable Turnover: Credit Sales Accounts Receivable Average Collection Period: 365 Receivable Turnover Inventory Turnover: Cost of Goods Sold Inventory Days in Inventory: 365 Inventory Turnover Solvency Debt to Total Assets: Total Liabilities Total Assets Times Interest Earned Profit+Interest Expense+Income Tax Expense Interest Expense Debt to Total Equity: Total Liabilities Total Equity Which Arrow Root Is higher or lower better? company is better? 6 Profitability Profit Margin: Profit Sales Return On Assets (ROA): Profit Total Assets Asset Turnover: Sales Total Assets Earnings Per Share: Profit - Preferred Dividends Weighted Average Number of Shares IIIII Price Earnings: Market Price per share EPS Return on Common Shareholder's Equity Profit - Preferred Dividends Common Shareholder's Equity