You have obtained the financial statements of A-Tec and Bi-Sci, two new companies in the high-tech industry. Both companies have just completed their second full year of operations. You have acquired the following information for an analysis of the companies (amounts in thousands):

Required 

a. Calculate the following ratios for the two companies for the two years. For 2019, assume the current year amount is equal to the average where required.

i. Current ratio

ii. Accounts receivable turnover

iii. Inventory turnover

iv. Debt to equity

v. Interest coverage

vi. Gross margin

vii. Profit margin

viii. Return on assets

ix. Return on equity

b. Write a brief analysis of the two companies based on the information given and the ratios calculated. Be sure to discuss issues of short-term liquidity, activity, solvency, and profitability. Which company appears to be the better investment for the shareholder? Explain. Which company appears to be the better credit risk for the lender? Explain. Is there any other information you would like to have to complete your analysis?

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A-Tec Bi-Sci 2020 2019 2019 2020 $ 25 $ 10 $ 25 Cash Accounts receivable 195 140 120 100 Inventory 130 100 110 100 Prepaid expenses 5 5 5 5 350 Capital assets (net) 300 230 160 Current liabilities 110 125 50 50 Long-term debt 200 220 Share capital-common shares 100 100 220 220 Retained earnings 280 100 220 120 1,900 Sales (all credit sales) 1,300 1,250 1,200 1,250 900 910 Cost of goods sold 900 Interest expense 20 22 Taxes (30%) 77 56 64 56 Net income 180 130 150 130