Reference no: EM13480820

Comparative statement data for Al Sharif Company and Weber Company, two competitors, are presented below. All balance sheet data are as of December 31, 2012.

	Al Sharif Company	Weber Company
	2012	2012
Net sales	$450,000	$890,000
Cost of goods sold	260,000	620,000
Operating expenses	130,000	59,000
Interest expense	6,000	10,000
Income tax expense	10,000	65,000
Current assets	180,000	700,000
Plant assets (net)	600,000	800,000
Current liabilities	75,000	300,000
Long-term liabilities	190,000	200,000
Cash from operating activities	46,000	180,000
Capital expenditures	20,000	50,000
Dividends paid	4,000	15,000
Average number of shares outstanding	200,000	400,000

Instructions

(a) Compute the net income and earnings per share for each company for 2012.

(b) Comment on the relative liquidity of the companies by computing working capital and the current ratio for each company for 2012.

(c) Comment on the relative solvency of the companies by computing the debt to total assets ratio and the free cash flow for each company for 2012.