Answer:
a. Blos som Co. Oriole Company
Net sales $2,592,000 $892,800
Less: Cost of goods sold $(1,692,000) $(489,600)
Less: Operating expenses $(407,520) $(141,120)
Less: Interest expense $(12,960) $(5,472)
Less; Income tax expense $(122,400) $(51,840)
Net income $357,120 $204,768
Earning per shares = Net income / Weighted average number of shares
Blos som Co.
Earning per shares = $357,120 / 80,000
Earning per shares = $4.46
Oriole Company
Earning per shares = $204,768 / 50,000
Earning per shares = $4.10
b. Blos som Company Oriole Company
Current assets $501,300 $191,836
Less: Current liabilities $(95,508) $(48,551)
Working capital $405,792 $143,285
Current ratio = Current assets / Current liabilities
Blos som Co.
Current ratio = $501,300 / $95,508
Current ratio = $5.2
Oriole Company
Current ratio = $191,836 / $48,551
Current ratio = $4.0
3. Debt to assets = Total Liabilities / Total Assets
Blos som Company Oriole Company
Total liabilities $95,508 + $156,240 $48,551 + $58,585
= $251,748 = $107,136
Total assets $501,300 + $766,080 $191,836 + $201,208
= $1,267,380 = $393,044
Debt to assets 19.9% 27.3%
Blos som Company Oriole Company
Net cash provided by $198,720 $51,840
operating activities
Less: Capital expenditure $(129,600) $(28,800)
Less: Dividends paid $(51,840) $(21,600)
Free cash flow $17,280 $1,440
