Selected data from the financial statements of Italian Marble Co. and Brazil Stone Products for the year just ended follow. Assume that for both companies dividends declared were equal in amount to net earnings during the year and therefore stockholders€™ equity did not change. The two companies are in the same line of business.

Compute the following for each company and state a brief conclusion about which company is in the stronger financial position.
a. Net income.
b. Net income as a percentage of stockholders€™ equity.
c. Accounts receivable turnover.
d. Inventoryturnover.

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Italian Brazil Stone Marble Co. Products Total liabilities Total assets Sales (all on credit).. . .$ 200,000 100,000 400,000 800,000 1,800,000 240,000 Average receivables Gross profit as a percentage of sales... Operating expenses as a percentage of sales Net income as a percentage of sales 140,000 100,000 30% 25% 5% 200,000 40% 36% 3%