You have obtained the financial statements of A-Tec and Bi-Sci, two new companies in the high-tech industry. Both companies have just completed their second full year of operations. You have acquired the following information for an analysis of the companies (amounts in thousands):

Required:
a. Calculate the following ratios for the two companies for the two years:
i. Current ratio
ii. Accounts receivable turnover
iii. Inventory turnover
iv. Total asset turnover
v. Debt to equity
vi. Times interest earned
vii. Gross margin ratio
viii. Net profit margin
ix. ROA
x. ROE
b. Write a brief analysis of the two companies based on the information given and the ratios calculated. Be sure to discuss issues of short-term liquidity, activity, solvency, and profitability. Which company appears to be the better investment for the shareholder? Explain. Which company appears to be the better credit risk for the lender? Explain. Is there any other information you would like to have to complete your analysis?

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A-Tec Bi-Sci 2010 2009 2010 2009 Cash Accounts receivable Iventory Other current assets Capital assets (net) Current liabilities Long-term debt Share capital common shares etained carnings Sales (all credit sales Cost of goods sold Interest expense Taxes (30%) Net earnings s 10 195 130 140 100 s 25 120 110 S 25 100 100 300 125 220 100 100 1,300 900 180 50 350 L10 200 100 280 1,900 1,250 20 230 50 220 220 1.250 910 120 1,200 900 56 130 64 150 566 130) 180