You work for an investment firm specializing in Atlantic Canadian based publicly traded companies.Your boss is looking
Question:
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You work for an investment firm specializing in Atlantic Canadian based publicly traded companies.Your boss is looking into an investment in the seafood industry and has narrowed the selection down to two companies.
In Canada, High Liner Foods and Clearwater Seafoods are both in the seafood industry. Both companies harvest, process, and distribute seafood. Clearwater concentrates on shellfish such as lobster, scallops, clams, cold-water shrimp, and crab, whereas High Liner Foods has a broader product line and includes various species of fish as well as shellfish.
The statement of financial position and statement of income forHigh Liner Foods IncorporatedandClearwater Seafoods Incorporatedare inthe attached images.
You have been asked to calculate the common-size analysis of the statements of income (loss) for the two companies for both years in the attached Analysis image, explain why you think the profit margins are so different for the two companies, and explain which areas High Liner Foods seems to have an advantage and which areas Clearwater Seafoods has an advantage.
Additionally, you will need to compare the current and quick ratios for the two companies, determine which company is more liquid, and explain why there is a significant difference between the current ratio and the quick ratio for the companies.
Lastly please compare the inventory turnover ratio for each company.
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