Following are data from the statements of two companies (Salama Insurance Co. And Wataniya Insurance Co.)...

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Following are data from the statements of two companies (Salama Insurance Co. And Wataniya Insurance Co.) Providing similar products: Income Statement Data for 2020 Net Sales Cost of Goods Sold Selling and administrative expense Interest expense Other Income (Expense) Income Tax Expense Net Income Balance Sheets Data (End of 2020) Current Assets NonCurrent Assets Total Assets Current Liabilities Long-term Debt Total stockholders' Equity Total Liabilities and stockholders Equity Beginning-of-2020 Balances Total Assets Total stockholders' Equity Current Liabilities Total Liabilities Other Data Average Net Accounts Receivable Average Inventory Salama Insurance Co. $61,750 39,900 12,950 548 -68 1,198 $3,245 $20,245 26,200 $41,850 $11,245 17,400 15,450 $41,500 $43,850 13,240 10,300 28,750 $8,100 8,020 Wataniya Insurance Co. $362,000 27,680 69,785 1,745 -362 6,623 $13,580 $48,750 124,750 $159,750 $50,450 40,780 71,450 $169,750 $161,250 62,480 52,640 94,500 $4,120 32,500 Net Cash Provided by Operating Activities Capital Expenditures Dividends 4,900 1,452 495 25,900 10,750 3,850 Required: Compare the Solvency, Liquidity and Profitability position of the two companies by Calculating current ratio, Account Receivable Turnover, Average Collection Period (In Days) (365 days / Account Receivable Turnover), Inventory Turnover, Days in Inventory, Current Cash Debt Coverage (net cash provided by operating activities / average current liability), Profit Margin, Asset Turnover, Return on Assets, Return on Common Stockholder's Equity, Debt to Assets, Times Interest Earned, Cash Debt Coverage (net cash provided by operating activities / average total liability) and free Cash Flow (net cash provided by operating activities Capital expenditures-cash dividends). Then state which company you think is better in short-term and why (Interpretation) and under the assumption that each company's stock can be purchased at book value, state which company's stock you think is better to invest and why (Interpretation). Following are data from the statements of two companies (Salama Insurance Co. And Wataniya Insurance Co.) Providing similar products: Income Statement Data for 2020 Net Sales Cost of Goods Sold Selling and administrative expense Interest expense Other Income (Expense) Income Tax Expense Net Income Balance Sheets Data (End of 2020) Current Assets NonCurrent Assets Total Assets Current Liabilities Long-term Debt Total stockholders' Equity Total Liabilities and stockholders Equity Beginning-of-2020 Balances Total Assets Total stockholders' Equity Current Liabilities Total Liabilities Other Data Average Net Accounts Receivable Average Inventory Salama Insurance Co. $61,750 39,900 12,950 548 -68 1,198 $3,245 $20,245 26,200 $41,850 $11,245 17,400 15,450 $41,500 $43,850 13,240 10,300 28,750 $8,100 8,020 Wataniya Insurance Co. $362,000 27,680 69,785 1,745 -362 6,623 $13,580 $48,750 124,750 $159,750 $50,450 40,780 71,450 $169,750 $161,250 62,480 52,640 94,500 $4,120 32,500 Net Cash Provided by Operating Activities Capital Expenditures Dividends 4,900 1,452 495 25,900 10,750 3,850 Required: Compare the Solvency, Liquidity and Profitability position of the two companies by Calculating current ratio, Account Receivable Turnover, Average Collection Period (In Days) (365 days / Account Receivable Turnover), Inventory Turnover, Days in Inventory, Current Cash Debt Coverage (net cash provided by operating activities / average current liability), Profit Margin, Asset Turnover, Return on Assets, Return on Common Stockholder's Equity, Debt to Assets, Times Interest Earned, Cash Debt Coverage (net cash provided by operating activities / average total liability) and free Cash Flow (net cash provided by operating activities Capital expenditures-cash dividends). Then state which company you think is better in short-term and why (Interpretation) and under the assumption that each company's stock can be purchased at book value, state which company's stock you think is better to invest and why (Interpretation).

Answer rating: 100% (QA)

Based on the financial information provided for Salama Insurance Co and Wataniya Insurance Co we will calculate various financial ratios to compare the solvency liquidity and profitability of the two ... View the full answer