As loan analyst for Madison Bank, you have been presented the following information.
Plunkett Co.
Herring Co.
Assets
Cash $122,700 $319,900
Receivables 217,900 301,200
Inventories 565,100 515,500
Total current assets 905,700 1,136,600
Other assets 491,300 616,600
Total assets $1,397,000 $1,753,200
Liabilities and Stockholders' Equity
Current liabilities $301,500 $349,300
Long-term liabilities 394,800 491,300
Capital stock and retained earnings 700,700 912,600
Total liabilities and stockholders' equity $1,397,000 $1,753,200
Annual sales $947,800 $1,515,300
Rate of gross profit on sales 25 % 35 %
Each of these companies has requested a loan of $49,330 for 6 months with no collateral offered. In as much as your bank has reached its quota for loans of this type, only one of these requests is to be granted.
Compute the various ratios for each company.