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The current year financial statements for Blue Water Company and Prime Fish Company are presented below. Balance sheet Cash Accounts receivable (net) Inventory Property & equipment (net) Other assets Total assets Current liabilities Long-term debt (interest rate: 10 %) Capital 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 Blue Water $ 42,800 47,000 90,000 167,000 85,800 $ 432,600 $ 90,000 77,600 160,600 30,800 73,600 $432,600 $ 420,000 (232,000) (164,600) $ 23,400 $23.8 30% $ 34,800 Prime Fish $ 19,200 36,400 50,800 422,600 323,000 $ 852,000 $ 76,000 63,600 530,000 107,800 74,600 $ 852,000 $ 784,000 (401,800) (312,800) $ 69,400 $ 33 30% $ 157,000 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 ts president has said, "We avoid what we consider to be undue risk." Neither company is publicly held.

The current year financial statements for Blue Water Company and Prime Fish Company are presented below. Balance sheet Cash Accounts receivable (net) Inventory Property & equipment (net) Other assets Total assets Current liabilities Long-term debt (interest rate: 10 %) Capital 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 Blue Water $ 42,800 47,000 90,000 167,000 85,800 $ 432,600 $ 90,000 77,600 160,600 30,800 73,600 $432,600 $ 420,000 (232,000) (164,600) $ 23,400 $23.8 30% $ 34,800 Prime Fish $ 19,200 36,400 50,800 422,600 323,000 $ 852,000 $ 76,000 63,600 530,000 107,800 74,600 $ 852,000 $ 784,000 (401,800) (312,800) $ 69,400 $ 33 30% $ 157,000 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 ts president has said, "We avoid what we consider to be undue risk." Neither company is publicly held.

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
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The current year financial statements for Blue Water Company and Prime Fish Company are presented below. Balance sheet Cash Accounts receivable (net) Inventory Property & equipment (net) Other assets Total assets Current liabilities Long-term debt (interest rate: 10%) Capital 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 Show Transcribed Text Profitability ratios: 1. Return on equity ratio 2. Return on assets ratio Ratio 3. Gross profit margin 4. Net profit margin ratio 5. Earnings per share ratio Asset turnover ratios: 6. Total asset turnover ratio 7. Fixed asset turnover ratio 8. Receivable turnover ratio 9. Inventory turnover ratio Liquidity ratios: 10. Current ratio 11. Quick ratio 12. Cash ratio Solver ratios: 13. Debt to equity ratio Market ratios: 14. Price earnings ratio 15. Dividend yield ratio 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. BLUE WATER COMPANY Blue Water $ 42,800 47,000 90,000 167,000 85,800 $ 432,600 % % % % $ 90,000 77,600 160,600 30,800 73,600 $ 432,600 Required: 1. Using year-end balances for all ratios, compute the following ratios: Note: 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). % $ 420,000 (232,000) (164,600) $ 23,400 $23.8 30% $ 34,800 PRIME FISH COMPANY Prime Fish $ 19, 200 36,400 50,800 422, 600 323,000 $ 852,000 % % % % $ 76,000 63,600 530,000 107,800 74,600 $ 852,000 % $ 784,000 (401,800) (312,800) $ 69,400 $ 33 30% $ 157,000
Transcribed Image Text:The current year financial statements for Blue Water Company and Prime Fish Company are presented below. Balance sheet Cash Accounts receivable (net) Inventory Property & equipment (net) Other assets Total assets Current liabilities Long-term debt (interest rate: 10%) Capital 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 Show Transcribed Text Profitability ratios: 1. Return on equity ratio 2. Return on assets ratio Ratio 3. Gross profit margin 4. Net profit margin ratio 5. Earnings per share ratio Asset turnover ratios: 6. Total asset turnover ratio 7. Fixed asset turnover ratio 8. Receivable turnover ratio 9. Inventory turnover ratio Liquidity ratios: 10. Current ratio 11. Quick ratio 12. Cash ratio Solver ratios: 13. Debt to equity ratio Market ratios: 14. Price earnings ratio 15. Dividend yield ratio 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. BLUE WATER COMPANY Blue Water $ 42,800 47,000 90,000 167,000 85,800 $ 432,600 % % % % $ 90,000 77,600 160,600 30,800 73,600 $ 432,600 Required: 1. Using year-end balances for all ratios, compute the following ratios: Note: 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). % $ 420,000 (232,000) (164,600) $ 23,400 $23.8 30% $ 34,800 PRIME FISH COMPANY Prime Fish $ 19, 200 36,400 50,800 422, 600 323,000 $ 852,000 % % % % $ 76,000 63,600 530,000 107,800 74,600 $ 852,000 % $ 784,000 (401,800) (312,800) $ 69,400 $ 33 30% $ 157,000
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