P2.4A (LO 2), AN Comparative financial statement data for Loeb Corporation and Bowsh Corporation, two competitors, appear below. All balance sheet data are as of December 31, 2022.

Compute ratios; comment on relative profitability, liquidity, and solvency.

		Loeb Corporation		Bowsh Corporation
		2022		2022
Net sales		$1,800,000		$620,000
Cost of goods sold		1,175,000		340,000
Operating expenses		283,000		98,000
Interest expense		9,000		3,800
Income tax expense		85,000		36,000
Current assets		407,200		190,336
Plant assets (net)		532,000		139,728
Current liabilities		66,325		33,716
Long-term liabilities		108,500		40,684
Net cash common by operating activities		138,000		36,000
Capital expenditures		90,000		20,000
Dividends paid on common stock		36,000		15,000
Weighted-average common shares outstanding		80,000		50,000

Instructions

a. Comment on the relative profitability of the companies by computing the net income and earnings per share for each company for 2022.

b. Comment on the relative liquidity of the companies by computing working capital and the current ratio for each company for 2022.

c. Comment on the relative solvency of the companies by computing the debt to assets ratio and the free cash flow for each company for 2022.

Problem 2.4A Loeb Corporation and Bowsh Corporationi Locb Corporation Bowsh Corporation La) Calculation of EPS Net Sales 10 2 COGS 11 31 margin 12 operating Expense 13 S EBIT 14 B Net income 15 7 16 8 Farnings per share 17 91 18.10 11 Analysis 19 21 131 22 141 23 154 24166) 25 17 26 181 27 19 Working capital 28 202 2921 Current ratio 25 Analysis 36 3 38 30 19 51 Debt to assets ratio 45 3Tirree cas 46 38 Analysis 47 89 48 40 Sheet1 Select destination and press ENTER or choose Paste Problem 2.4A Loeb Corporation and Bowsh Corporationi Locb Corporation Bowsh Corporation La) Calculation of EPS Net Sales 10 2 COGS 11 31 margin 12 operating Expense 13 S EBIT 14 B Net income 15 7 16 8 Farnings per share 17 91 18.10 11 Analysis 19 21 131 22 141 23 154 24166) 25 17 26 181 27 19 Working capital 28 202 2921 Current ratio 25 Analysis 36 3 38 30 19 51 Debt to assets ratio 45 3Tirree cas 46 38 Analysis 47 89 48 40 Sheet1 Select destination and press ENTER or choose Paste