EXERCISES 1. Given the selected financial data for Company A and Company B (both in the same industry sector): Company A Company B Net Income Statement (current) Net sales Cost of goods sold Selling and administrative expenses Interest expense Other income (expense) Income tax expense Net income 61.526 41.913 16.044 556 1.619 1.743 2.889 374.913 288.470 68.088 1.407 3.492 6.964 13.476 Balance Sheet (current) Current assets Noncurrent assets Total assets Current liabilities Long-term debt Total Liabilities Total stockholders' equity Total liabilities and stockholders' equity 17.286 24.708 41.994 11.505 13.442 24.947 17.047 41.994 52.589 113.236 165.825 58.591 43.428 102.019 63.806 165.825 Beginning of Year Balances Total assets Total stockholders' equity Current liabilities Current Liabilities Total liabilities 38.751 15.634 9.864 23.116 144.184 59.275 51.818 84.909 Other Data Average net receivables Average inventory Net cash provided by operating activities 6.441 6.733 5.341 2.626 37.172 21.159 For each company compute the ratios described below and compare liquidity, solvency and profitability for both: 1 Times Interest earned 2 Average collection period 3. Profit margin 4. Return on Assets 5. Return on common stockholders equity 6. Current 7. Inventory turnover 8. Asset turnover 9. Debt to total Assets 10. Receivables turnover 11. Days in inventory