The 2013 financial statements for Armstrong and Blair companies are summarized here:

The companies are in the same line of business and are direct competitors in a large metropolitan area. Both have been in business approximately 10 years, and each has had steady growth. One-third of both companies' sales are on credit. Despite these similarities, the management of each has a different viewpoint in many respects. Blair is more conservative, and as its president said, "We avoid what we consider to be undue risk." Both companies use straight-line depreciation, but Blair estimates slightly shorter useful lives than Armstrong. No shares were issued in 2013, and neither company is publicly held. Blair Company has an annual audit by a CPA but Armstrong Company does not. Assume the end-of-year total assets and net property and equipment balances approximate the year's average.
Required:
1. Calculate the ratios in Exhibit 13.5 for which sufficient information is available. Round
all calculations to two decimal places.
2. A venture capitalist is considering buying shares in one of the two companies. Based on the data given, prepare a comparative written evaluation of the ratio analyses (and any other available information) and conclude with your recommended choice?

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Armstrong Company Blair Company Balance Sheet Cash Accounts Receivable, Net Inventory Property and Equipment, Net Other Assets Total Assets 35,000 40,000 100,000 180,000 45,000 $400,000 $ 22,000 30,000 40,000 300,000 408,000 $800,000 Current Liabilities Long-term Debt Total Liabilities Common Stock (par $10) Additional Paid-in Capital Retained Earnings Total Liabilities and Stockholders' Equity Income Statement Sales Revenue (1/3 on credit) Cost of Goods Sold Other Expenses Net Income $100,000 60,000 160,000 150,000 30,000 60,000 $400,000 $50,000 370,000 420,000 200,000 110,000 70,000 $800,000 $450,000 (245,000) 160,000) S 45,000 $810,000 (405,000) (315,000) $90,000 Selected Data from 2012 Statements Accounts Receivable, Net Inventory Property and Equipment, Net Long-term Debt Total Stockholders' Equity Other Data Estimated value of each share at end of 2013 $ 20,000 92,000 180,000 60,000 231,000 $ 38,000 45,000 300,000 70,000 440,000 $ 18 $27