The financial statements for Armstrong and Blair companies for the current year are summarized below: Blair Company Statement of Financial Position Cash Accounts receivable (net) Inventory. Property, plant, and equipment (net). Other non-current assets Total assets Current liabilities Long-term debt (10%) Share capital Contributed surplus Retained earnings Total liabilities and shareholders' equity Statement of Earnings Sales revenue (1/3 on credit) Cost of sales Expenses (including interest and income tax) Net earnings Accounts receivable (net) Inventory Long-term debt Other data: Share price year-end Income tax rate Dividends declared and paid Shares Outstanding Selected data from the financial statements for the previous year follows: Blair Company Armstrong Company 24,000 88,000 80,000 $ 44,000 Profitability ratios: Ratio Gross profit percentage Profit margin Earnings per share Asset turnover ratios: Fixed Asset turnover Receivables turnover Inventory turnover Liquidity ratios Current ratio Market tests: $ Price/earnings ratio Dividend yield ratio $ $ % 18 30% 40,000 15,000 % % per share times times times The companies are in the same line of business and are direct competitors in a large metropolitan area. Both have been in business approximately ten years, and each has had steady growth. The management of each has a different viewpoint in many respects. Blair Company is more conservative, and as its president said, "We avoid what we consider to be undue risk." Neither company is publicly held. Armstrong Company has an annual audit by an independent auditor, but Blair Company does not. Armstrong Company $ Required: 1. Complete a schedule that reflects a ratio analysis of each company. Use ending balances if average balances are not available. (Round intermediate calculations and final answers to 2 decimal places.) HINT: To calculate Current Ratio, you will need to first calculate the total Current Assets. Armstrong Company Blair Company $ 35,400 $ 26,000 36,000 34,000 36,000 440,000 316,000 $ 852,000 $ 47,000 80,000 540,000 124,000 61,000 $ 852,000 140,000 160,000 89,000 $ 460,400 $ 110,000 80,000 158,000 34,000 78,400 $ 460,400 $ 490,000 (269,500) (166,600) $ 53,900 40,000 80,000 15 30% $190,000 50,000 % % per share $ 850,000 (425,000) (323,000) $ 102,000 times times times %

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