Daniel and Emily have received a sizable amount of cash from the sale of their shares of

Question:

Daniel and Emily have received a sizable amount of cash from the sale of their shares of ABC. As a result, they are considering where they should invest this money. They recognize how profitable ABC continues to be as a subsidiary of Soft ware Solutions and are considering investing some of their excess cash in Soft ware Solutions. They have accumulated a number of ratios for Software Solutions Inc., and Micro Inc. (a publicly traded competitor of Software Solutions), in addition to the overall industry to enable them to make a decision on whether or not they should invest in Soft ware Solutions.

Instructions
(a) Which company is more liquid? Explain.
(b) Which company is more solvent? Explain.
(c) Which company is more profitable? Explain.
(d) If an investor was more interested in receiving dividend income than in appreciation of the share price, which company's shares would they prefer to buy?
(e) If an investor was more interested in appreciation of the share price than receiving dividend income, which company's shares would they prefer to buy?
(f) What other factors must Natalie and Daniel consider before making an investment in any public company?
(g) Emily and Daniel are familiar with ASPE from their previous experience with Anthony Business Company as a private company. Soft ware Solutions and Micro use IFRS. Are there any particular differences Emily and Daniel should be aware of that might affect their analysis of these two companies?
(h) What other factors must Emily and Daniel consider before making an investment in any public company?