Question

Suppose selected financial data of Edgewater Company and The Ritter Company for 2014 are presented here (in millions).


Instructions
(a) For each company, compute the following ratios.
(1) Current ratio.
(2) Accounts receivable turnover.
(3) Average collection period.
(4) Inventory turnover.
(5) Days in inventory.
(6) Profit margin.
(7) Asset turnover.
(8) Return on assets.
(9) Return on common stockholders’ equity.
(10) Debt to assets ratio.
(11) Times interest earned.
(12) Current cash debt coverage.
(14) Free cash flow.
(13) Cash debt coverage.

(b) Compare the liquidity, solvency, and profitability of the twocompanies.


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  • CreatedApril 07, 2014
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