70.2K

Verified Solution

Link Copied!

what is the answer for the quality of income, times interest earned ratio, and the cash coverage ratio? Thank you!

The current year financial statements for Blue Water Company and Prime Fish Company are presented below. Blue Water Prime Pish Balance sheet: Cash Accounts receivable (net) Inventory Property & equipment (net) Other assets Total assets Current liabilities Long-term debt (interest rate: 109) 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 $ 41,000 38,000 99,000 140,000 84,000 $ 402,000 $ 99,000 65,000 148,000 29,000 61,000 $ 402,000 $ 21,000 31,000 40,000 401,000 305,000 $ 798,000 $ 49,000 60,000 512.000 106,000 71,000 $ 798,000 $ 447,000 (241,000) (161,000) $ 45,000 $ 802,000 (400,000) (311,000) $ 91,000 $ 22 300 $ 33,000 15 308 $ 148,000 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. RATIO BLUE WATER COMPANY PRIME FISH COMPANY 18.91 11.19 13.21 11.40 % % % % % % % 46.09 50.12 10.07 11.35 % $ 3.04 $ 1.78 0.91 0.23 1.11 1.01 3.19 2.00 Profitability ratios: 1. Return on equity 2. Return on assets 3. Gross profit percentage 4. Net profit margin 5. Earnings per share 6. Quality of income Asset turnover ratios: 7. Total asset turnover 8. Fixed asset turnover 9. Receivable turnover 10. Inventory turnover Liquidity ratios: 11. Current ratio 12. Quick ratio 13. Cash ratio Solvency ratios: Times interest earned 14. ratio Cash coverage ratio 16. Debt/equity ratio 3.92 8.62 >> 2.43 10.00 1.80 1.88 0.80 1.06 0.41 0.43 10.00 20.72 15. 6.92 15.17 0.69 0.16

Answer & Explanation Solved by verified expert

See Answer