The following are the ratios of two companies ABC and XYZ belonging to the same industry: Ratio

The following are the ratios of two companies ABC and XYZ belonging to the same industry:

Transcribed Image Text:

Ratio Current ratio Quick ratio Gross profit margin Operating profit margin Net profit margin ABC 3.20: 1 1.45:1 40% 22% 10% 12% 6 times 8 times 3 times 3:1 Return on investment Inventory turnover Debtors turnover Fixed asset turnover ratio Debt: equity ratio EPS Return on shareholders' net worth Compare the financial performance of both the companies and comment. 6.50 14% XYZ 1.50:1 1:1 33% 21% 8% 13% 8 times 8 times 4 times 1.75: 1 5.25 10%