CH17 Graded Written Homework PROBLEM 1 Summary information for the financial statements of two companies competing in the same industry follows Clock Company Code Canpany Company Data from the current werend balance sheets Asus $ $ 22,000 23,000 105,000 1,500 461500 3 631,000 Accounts receivable.net Merchandise inventory Prepaid expenses Plant net Total Phone Company Data from the current year's incoma t $ 350,000 Cost of goods sold 552,000 Intant expense 17 000 Income tax perse 141,000 Net income 35,900 19,000 55,000 120,000 20.000 471000 8.000 $120000 545,000 22.500 229,000 54.600 3 L ilities and Equity Current Long-term rotas payable Common sted, $10 per value Retained earnings Total abilities and equity $ 77,000 247,500 225,000 81,500 3 631,000 $ 91,000 309,000 200,000 94,000 3 15,000 Beginning-of-the-year balance sheet data Accounts receivable net $ 21,400 Merchandise inventory 72.000 Total 541,000 Common stod, 530 per value 225.000 Regined emings 69,000 S 43,000 105,000 S65.000 20000 68.000 Part A In the space provided on the following pages), compute the following for both companies, rounding to two decimal places and put your final answer in the answer boxes provided: 1) Working capital 2) Current ratio 3) Accounts receivable turnover 4) Inventory turnover 5) Debt ratio 6) Profit margin ratio Part B: Identify which company's stock you would recommend as the better investment, and justify your answer by comparing the liquidity, efficiency, solvency and profitability of the two companies