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8.1 Presented below are condensed financial statements adapted from those of two actual companies competing as the primary players in a specialty area of the food manufacturing and distribution Industry. ($ in millions, except per share amounts.) Balance Sheets Metropolitan Republic Assets Cash $ 271.3 $ 42.8 Accounts receivable (net) 503.7 403.0 Short-term investments Inventory 550.4 798.2 Prepaid expenses and other current assets 205.6 567.7 Current assets $ 1,531.0 $ 1,729.8 Property, plant, and equipment (net) 2,696.2 2,589. Intangibles and other assets 287.3 582.7 Total assets $ 4,514.5 $ 4,901.5 Liabilities and Shareholders' Equity Accounts payable $ 560.9 $ 777.2 Short-term notes 301.1 632.4 Accruals and other current liabilities 673.2 612.5 Current liabilities $ 1,535.2 $ 2,022.1 Long-term debt 634.6 635.3 Deferred tax liability 464.6 697.7 Other long-term liabilities 202.0 186.1 Total liabilities $ 2,836.4 $ 3,541.2 Common stock (par and additional paid- 219.9 428. in capital) Retained earnings 2,556.9 1,690.9 Less: Treasury stock (1,098.7) (758.6) Total liabilities and shareholders' $ 4,514.5 $ 4,901.5 equity Income Statements Net sales $ 5,784.0 $ 7,845.2 Cost of goods sold (2,830.0) (4,399.7) Gross profit $ 2,954.0 $ 3,445.5 Operating expenses (1,656.7) (2,742.2) Interest expense (77.8 (46.6) Income before taxes $ 1,219.5 $ 656.7 Income tax expense (300.7) (126.1) Net income $ 918.8 $ 530.6 Net income per share $ 2.5 $ 7.5 Evaluate and compare the two companies by responding to the following questions. Note: Because comparative statements are not provided you should use year-end balances in place of average balances as appropriate Required: 1. For both companies, compute the ratlos below. 2. Evaluate and compare the two companies. Complete this question by entering your answers in the tabs below. Required 1 Required 2 For both companies, compute the ratios below. (Consider 365 days a year. Do not round intermediate calculations and round your final answers to 2 decimal places.) Metropolitan Republic Return on Assets % % Profit Margin % % Asset Turnover times times Return on Equity % Equity Multiplier Acid-Test Ratio Current Ratio Receivables Turnover times times Inventory Turnover times times Times Interest Earned times times