Question

Assume that you are purchasing an investment and have decided to invest in a company in the smartphone business. You have narrowed the choice to SW Electronics or Nahla Electronics and have assembled the following data. Selected income statement data for the current year follows:


Selected balance sheet data at the beginning of the current year follows:


Selected balance sheet and market- price data at the end of the current year follows:


Requirement
Compute the following ratios for both companies for the current year and decide which company’s stock better fits your investment strategy.
a. Acid- test ratio
b. Inventory turnover
c. Days’ sales in average receivables
d. Debt ratio
e. Earnings per share of common stock
f. Price/ earningsratio


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  • CreatedAugust 27, 2014
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