Comprehensive Ratio Analysis of Two Companies Mel Filbert is considering an investment in the common stock of a chain of retail department stores. She has narrowed her choice to two retail companies, Single Corporation and Design Corporation, whose income statements and balance sheets follow. Income Statements Single Design Net sales $12,560,000 $25,210,000 Costs and expenses: Cost of goods sold $ 6,142,000 $14,834,000 Selling expenses 4,822,600 7,108,200 Administrative expenses 986,000 2,434,000 Total operating expenses $11,950,600 $24,376,200 Income from operations $ 609,400 $ 833,800 Interest expense 194,000 228,000 Income before income taxes $ 415,400 $ 605,800 Income taxes expense 200,000 300,000 Net income $ 215,400 $ 305,800 Earnings per share $ 4.31 $ 10.19 Balance Sheets Single Design Assets Cash $ 80,000 $ 192,400 Marketable securities (at cost) 203,400 84,600 Accounts receivable (net) 552,800 985,400 Inventory 629,800 1,253,400 Prepaid expenses 54,400 114,000 Property, plant, and equipment (net) 2,913,600 6,552,000 Intangibles and other assets 553,200 144,800 Total assets $4,987,200 $9,326,600 Liabilities and Stockholders' Equity Accounts payable $ 344,000 $ 572,600 Notes payable 150,000 400,000 Income taxes payable 50,200 73,400 Bonds payable 2,000,000 2,000,000 Common stock, $20 par value 1,000,000 600,000 Additional paid-in capital 609,800 3,568,600 Retained earnings 833,200 2,112,000 Total liabilities and stockholders' equity $4,987,200 $9,326,600 During the year, Single paid a total of $50,000 in dividends. The market price per share of its stock is currently $60. In comparison, Design paid a total of $114,000 in dividends, and the current market price of its stock is $76 per share. Single had net cash flows from operations of $271,500 and net capital expenditures of $625,000. Design had net cash flows from operations of $492,500 and net capital expenditures of $1,050,000. Information for prior years is not readily available. Assume that all notes payable are current liabilities and all bonds payable are long-term liabilities and that there is no change in inventory. Assume 365 days in a year. Conduct a comprehensive ratio analysis for each company, using the available information. Compare the results. Round all answers to one decimal place. When comparing the two companies, consider differences of 0.1 or less to be "Neutral". 1. Prepare an operating asset management analysis by calculating for each company the (a) current ratio, (b) quick ratio, (c) receivable turnover, (d) days' sales uncollected, (e) inventory turnover, (f) days' inventory on hand, (g) payables turnover, (h) days' payable, and (i) financing period.