Summary information from the financial statements of two companies competing in the same industry follows.

Required
1. For both companies compute the
(a) Current ratio,
(b) Acid-test ratio,
(c) Accounts (including notes) receivable turnover,
(d) Inventory turnover,
(e) Days’ sales in inventory, and
(f) Days’ sales uncollected. Identify the company you consider to be the better short-term credit risk and explain why.
2. For both companies compute the
(a) Profit margin ratio,
(b) Total asset turnover,
(c) Return on total assets, and
(d) Return on common stockholders’ equity. Assuming that each company paid cash dividends of $1.50 per share and each company’s stock can be purchased at $25 per share, compute their
(e) Price-earnings ratios and
(f) Dividend yields.
Identify which company’s stock you would recommend as the better investment and explainwhy.

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Ryan Priest Ryan Company Company Prlest Company Company Data from the current year-end balance sheets Assets Cash Accounts recelvable, net P Current notes Merchandise inventory . Prepaid expenses . Plant assets, net. Total assets. Data from the current year's income statement Sales . $660,000 $780,200 485,100 532.500 6,900 11,000 s 18,500 33000 Cost of goods sold 36,400 8.100 56.400 Interest expense.. recelvable (trade). 67,770 105,000 2.56 4,000 5,950 Basic earnings per share. 284,000 303,400 $434.440 $536.450 Beginning-of-year balance sheet data Accounts recelvable, net Liablities and Equity Current liabilities Long-term notes payable 79,800 100.000 Merchandise Inventory ....54,600 106.400 Common stock, $5 par value Retained earnings ..n Total labillties and equity$434.440 $536450 Retained earnings $ 28.800 53.200 60,340 92.300 Current notes recelvable (trade) 75,000 205.000 Total assets 19,300 39,150 Common stock, $5 par value 388,000 372500 175,000 205,000 ....94300 90,600