This problem continues the Canyon Canoe Company situation from Chapter 14. The company wants to invest some of its excess cash in trading securities and is considering two investments, The Paddle Company (PC) and Recreational Life Vests (RLV). The income statement, balance sheet, and other data for both companies follow for 2019 and 2018, as well as selected data for 2017:

Requirements
1. Using the financial statements given, compute the following ratios for both Companies for 2019 and 2018. Assume all sales are credit sales. Round all ratios to two decimal places.
a. Current ratio
b. Cash ratio
c. Inventory turnover
d. Accounts receivable turnover
e. Gross profit percentage
f. Debt ratio
g. Debt to equity ratio
h. Profit margin ratio
i. Asset turnover ratio
j. Rate of return on common stockholders' equity
k. Earnings per share
l. Price/earnings ratio
m. Dividend yield
n. Dividend payout
2. Compare the companies' performance for 2019 and 2018. Make a recommendation to Canyon Canoe Company about investing in these companies. Which company would be a better investment, The Paddle Company or Recreational Life Vests? Base your answer on ability to pay current liabilities, ability to sell merchandise and collect receivables, ability to pay long-term debt, profitability, and attractiveness as an investment.

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THE PADDLE COMPANY RECREATIONAL LIFE VESTS Comparative Financial Statements Comparative Financial Statements Years Ended December 31 Years Ended December 31 2019 2017 Income Statement 2018 2019 2018 2017 $ 410,570 $ 430,489 Net Sales Revenue $ 425,410 $ 383,870 Cost of Goods Sold 258,756 256,797 299,110 280,190 Gross Profit 171,733 168,613 111,460 103,680 Operating Expenses 153,880 151,922 78,290 70,830 Operating Income 17,853 16,691 33,170 32,850 Interest Expense 865 788 2,780 2,980 Income before Income Tax 16,988 15,903 29,870 30,390 4,809 8,780 8,630 Income Tax Expense 5,137 $ 11,094 $ 11,851 S 21,610 $ 21,240 Net Income Balance Sheet Assets $ 65,730 $ 55,270 $ 69,159 $ 70,793 Cash & Cash Equivalents $ 44, 104 Accounts Receivable 38,650 $ 36,460 44,798 44,452 39,810 Merchandise Inventory 79,919 76,363 65,230 66,341 68,500 59,930 Other Current Assets 37,630 15,494 16,264 24,450 Total Current Assets 197,850 209,370 198,490 196,780 Long-term Assets 89,834 90,776 116,760 116,270 $ 315,250 $ 313,050 S 299,204 $ 288,626 Total Assets $ 276,482 $ 310,640 Liabilities $ 69,554 $ 60,232 $ 90,810 $ 90,010 Current Liabilities Long-term Liabilities 31,682 29,936 96,310 105,890 Total Liabilities 101,236 90,168 187,120 195,900 Stockholders' Equity Common Stock 72,795 80,885 111,530 102,480 Retained Earnings 16,600 125,173 117,573 14,670 Total Stockholders' Equity 128,130 $ 315,250 197,968 198,458 197,668 117,150 103,840 $ 313,050 $ 299,204 $ 288,626 Total Liabilities and Stockholder's Equity Other Data $ 51.64 Market price per share 24 21.38 33.82 46.37 Annual dividend per share 0.32 0.30 0.53 0.45 Weighted average number of shares outstanding 9,000 8,000 9,000 8,000