Selected financial data for Tim Hortons and Starbucks are presented below for a recent year. Instructions (a)
Question:
Instructions
(a) For each company, calculate the following ratios:
1. Current ratio
2. Receivables turnover
3. Inventory turnover
4. Operating cycle
5. Debt to total assets
6. Interest coverage
7. Gross profit margin
8. Profit margin
9. Asset turnover
10. Return on assets
11. Return on equity
(b) Compare the liquidity, solvency, and profitability of the two companies.
Taking It Further
How should other comprehensive loss be factored into your analysis above?
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Asset turnover is sales divided by total assets. Important for comparison over time and to other companies of the same industry. This is a standard business ratio.
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Related Book For
Accounting Principles Part 3
ISBN: 978-1118306802
6th Canadian edition Volume 1
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Kinnear, Joan E. Barlow
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