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The current year financial statements for Blue Water Company and Prime Fish Company are presented below. Blue Water Prime Fish Inventory $ 43,000 48,000 89,000 170,000 86,000 $ 436,000 $ 89,000 79,000 162,000 Balance sheet: Cash Accounts receivable (net) Property & equipment (net) Other assets met Total assets Current liabilities ce stock ($10 par value) Additional paid-in capital Retained earnings Total liabilities and stockholders' equity Income statement: Sales revenue (1/3 on credit) Cost of goods sold Operating expenses Net income Other data: Per share stock price at end of current year Average income tax rate Dividends declared and paid in current year $ 19,000 37,000 52,000 425,000 325,000 $ 858,000 250 000 $ 79,000 64,000 532,000 108,000 75,000 $ 858,000 debt (interest rate: 10%) 31,000 75,000 $ 436,000 $ 417,000 (231,000) (165,000 $ 21,000 $ 782,000 (402,000) (313,000) $ 67,000 $ 24.0 30% 35,000 $ 35 30% $ 158,000 $ Both companies are in the fish catching and manufacturing business. Both have been in business approximately 10 years, and each has had steady growth. The management of each has a different viewpoint in many respects. Blue Water is more conservative, and as its president has said, We avoid what we consider to be undue risk. Neither company is publicly held. Required: 1. Complete a schedule that reflects a ratio analysis of each company. (Round your intermediate calculations and final answers to 2 decimal places. Enter percentage answers rounded to 2 decimal places (i.e. 0.1234 should be entered as 12.34).) Ratio BLUE WATER COMPANY PRIME FISH COMPANY Profitability ratios: 1. Return on equity 7.84 % 9.37 % 2. Return on assets 4.82 % 7.81 % 3. 44.60 % 48.59 % 4. 5.03 % 8.57 % Gross profit percentage Net profit margin Earnings per share Quality of income 5. . $ 1.30 $ 1.26 6. 0.00 0.00 Asset turnover ratios: 7. Total asset turnover 0.96 0.91 8. Fixed asset turnover 2.45 1.84 9. Receivable turnover 2.90 7.05 2.60 7.73 10. Inventory turnover Liquidity ratios: 11. Current ratio 2.02 1.37 12. Quick ratio 1.02 0.71 13. Cash ratio 0.48 0.24 0.48 x 0.24 X Solvency ratios: Times interest earned 14. ratio 15. Cash coverage ratio 16. Debt/equity ratio 0.48 x 0.24 x 0.29 X 0.09 X Market ratios: 17. Pricelearnings ratio 18.46 27.78

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