This problem continues the Canyon Canoe Company situation from Chapter F:16. The company wants to invest some of its excess cash in trading securities and is considering two investments, The Paddle Company (PC) and Recreational Life Vests (RLV). The income statement, balance sheet, and other data for both companies follow for 2025 and 2024, as well as selected data for 2023:

Requirements
1. Using the financial statements given, compute the following ratios for both companies for 2025 and 2024. Assume all sales are credit sales. Round all ratios to two decimal places.
a. Current ratio
b. Cash ratio
c. Inventory turnover
d. Accounts receivable turnover
e. Gross profit percentage
f. Debt ratio
g. Debt to equity ratio
h. Profit margin ratio
i. Asset turnover ratio
j. Rate of return on common stockholders’ equity
k. Earnings per share
l. Price/earnings ratio
m. Dividend yield
n. Dividend payout
2. Compare the companies’ performance for 2025 and 2024. Make a recommendation to Canyon Canoe Company about investing in these companies. Which company would be a better investment, The Paddle Company or Recreational Life Vests? Base your answer on ability to pay current liabilities, ability to sell merchandise and collect receivables, ability to pay long-term debt, profitability, and attractiveness as an investment.

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Income Statement Net Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses Operating Income Interest Expense Income before Income Tax Income Tax Expense Net Income Balance Sheet Assets Cash & Cash Equivalents Accounts Receivable Merchandise Inventory Other Current Assets Total Current Assets Long-term Assets Total Assets Liabilities Current Liabilities Long-term Liabilities Total Liabilities THE PADDLE COMPANY Comparative Financial Statements Years Ended December 31 2023 2025 2024 $430,489 $425,410 258,756 256,797 171,733 168,613 153,880 151,922 17,853 16,691 865 788 15,903 16,988 5,137 4,809 $ 11,851 $ 11,094 $ 69,159 $ 70,793 44,798 44,452 79,919 66,341 15,494 16,264 209,370 89,834 197,850 90,776 $ 299,204 $ 288,626 $ 69,554 $ 60,232 31,682 29,936 101,236 90,168 $ 44,104 76,363 $ 276,482 RECREATIONAL LIFE VESTS Comparative Financial Statements Years Ended December 31 2023 2025 2024 $ 410,570 $383,870 299,110 280, 190 111,460 103,680 70,830 32,850 2,980 29,870 78,290 33,170 2,780 30,390 8,780 8,630 $ 21,610 $ 21,240 $ 65,730 $ 55,270 39,810 38,650 68,500 24,450 $ 90,810 96,310 187,120 65,230 37,630 198,490 196,780 116,760 116,270 $ 315,250 $ 313,050 $ 90,010 105,890 195,900 $ 36,460 59,930 $ 310,640