The 2012 financial statements for the Price and Waterhouse companies are summarized here:

The companies are in the same line of business and are direct competitors in a large metropolitan area. Both have been in business approximately 10 years, and each has had steady growth. The management of each has a different viewpoint in many respects. Waterhouse is more conservative, and as its president has said, "We avoid what we consider to be undue risk." Neither company is publicly held. Price Company has an annual audit by a CPA but Waterhouse Company does not.
Required:
1. Complete a schedule that reflects a ratio analysis of each company. Compute the ratios discussed in the chapter.
2. A client of yours has the opportunity to buy 10 percent of the shares in one or the other company at the per share prices given and has decided to invest in one of the companies. Based on the data given, prepare a comparative written evaluation of the ratio analyses (and any other available information) and give your recommended choice with the supportingexplanation.

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Price Company Waterhouse Company Balance Sheet $ 41,000 $ 21,000 Cash Accounts receivable (net) Inventory Operational assets (net) 38,000 31,000 99,000 40,000 401,000 305,000 140,000 Other assets 84,000 $402.000 $798,000 Total assets $49,000 Current liabilities $99,000 65,000 148,000 Long-term debt (10%) Capital stock (par $10) Contributed capital in excess of par Retained earnings 60,000 512,000 29,000 61,000 106,000 71,000 $402.000 $798,000 Total liabilities and stockholders' equity Price Company Waterhouse Company Income Statement Sales revenue (1/3 on credit) Cost of goods sold Expenses (including interest and income tax) $447,000 (241,000) (161,000) $ 45,000 $802,000 (398,000) (311,000) $ 93,000 Net income Selected data from the 2011 statements $ 18,000 94,000 60,000 $ 38,000 Accounts receivable (net) Inventory Long-term debt 44,000 48,000 Other data $ 17 Per share price at end of 2012 (offering price) Average income tax rate Dividends declared and paid in 2012 15 30% 30% $ 33,000 $148,000