The Following Are Summaries from the Income Statements and Balance

The following are summaries from the income statements and balance sheets of Red Shoe,Inc.and Blue Shoe,Inc.




(1) For both companies compute the following ratios for 2014:
(a) Current ratio
(b) Acid-test ratio
(c) Accounts receivable turnover
(d) Inventory turnover
(e) Days' sales in inventory
(f) Days' sales uncollected
Which company do you consider to be the better short-term credit risk? Explain.
(2) For both companies compute the following ratios for 2014:
(a) Profit margin ratio
(b) Return on total assets
(c) Return on common stockholders' equity
Which company do you consider to have better profitability ratios?