The 9 companies are drawn from the following 9 different industries:

• Liquor producer and distributor

• Discount airline

• Commercial bank (items fitted into the same categories as the non-financial firms)

Match with the information below. and give some explanation.

• 

• Computer software company

• Large integrated oil and gas company

• The mobile phone service operator

• R&D-based pharmaceutical manufacturer

• Retail grocery company

• R&D-based semiconductor manufacturer

this is all information estimate base on this info
 
 
 
 

Transcribed Image Text:

Exhibit 1. Definitions of Some Key Financial Ratios LIQUIDITY RATIOS Cash & Marketable Securities to Total Assets = Acid Test Ratio (Cash + Market Securities) / Total Assets (Cash + Market Securities + Receivables) / Current Liabilities = Current Assets / Current Liabilities Current ratio ASSET MANAGEMENT Day's Receivable Day's Inventory Asset Turnover = 365 / (Sales / Receivables) = 365 / (Cost of Sales / Inventory) Sales / Total Assets FINANCIAL LEVERAGE Debt to Total Assets Debt to Stockholders' Equity Coverage Ratio (Total Current Debt + Long-term Debt) / Total Assets (Total Current Debt + Long-term Debt) / Stockholders' Equity (Operating Profit + Interest Expense) / Interest Expense PROFITABILITY = Gross Profit / Sales = Net Income / Sales = Net Income / Total Assets = Net Income / Stockholders' Equity Gross Margin Ratio Return on Sales Return on Assets Return on Equity DUPONT ANALYSIS Return on Equity Return on Sales * Asset Turnover * Leverage (Net Income / Sales) x (Sales / Assets) x (Assets / Stockholders' Equity) %3D Exhibit 1. Definitions of Some Key Financial Ratios LIQUIDITY RATIOS Cash & Marketable Securities to Total Assets = Acid Test Ratio (Cash + Market Securities) / Total Assets (Cash + Market Securities + Receivables) / Current Liabilities = Current Assets / Current Liabilities Current ratio ASSET MANAGEMENT Day's Receivable Day's Inventory Asset Turnover = 365 / (Sales / Receivables) = 365 / (Cost of Sales / Inventory) Sales / Total Assets FINANCIAL LEVERAGE Debt to Total Assets Debt to Stockholders' Equity Coverage Ratio (Total Current Debt + Long-term Debt) / Total Assets (Total Current Debt + Long-term Debt) / Stockholders' Equity (Operating Profit + Interest Expense) / Interest Expense PROFITABILITY = Gross Profit / Sales = Net Income / Sales = Net Income / Total Assets = Net Income / Stockholders' Equity Gross Margin Ratio Return on Sales Return on Assets Return on Equity DUPONT ANALYSIS Return on Equity Return on Sales * Asset Turnover * Leverage (Net Income / Sales) x (Sales / Assets) x (Assets / Stockholders' Equity) %3D

Answer rating: 100% (QA)

Financial Industry Commercial banks These firms have high expectations of being granted high loans and payables have high rates of assets compared to ... View the full answer