Comparative Financial Statement Data for Arthur Corporation and Lancelot Corporation

question 161

Essay

Comparative financial statement data for Arthur Corporation and Lancelot Corporation, two competitors, appear below. All balance sheet data are as of December 31, 2014. Instructions
(a) Comment on the relative profitability of the companies by computing the net income and earnings per share for each company for 2014.
(b) Comment on the relative solvency of the companies by computing the debt to assets ratio and the free cash flow for each company for 2014.

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Definitions:

Cell Death

The process by which a cell ceases to function and is eliminated, which can be a natural part of development or result from disease.

Brain Efficiency

The ability of the brain to perform tasks quickly and accurately using the least amount of mental effort.

Disjunct

A term used in logic to refer to an element of a disjunction, where at least one of the disjuncts must be true for the disjunction to be true.

Disjunction

An operation in logic that returns true when at least one input is true.