Interpreting liquidity and activity ratiosThe table, LOADING... , shows key financial data for three firms that compete in the consumer products market: Procter & Gamble, Colgate-Palmolive, and Clorox.

a. Calculate each of the following ratios for all three companies: current ratio, quick ratio, inventory turnover, average collection period, total asset turnover.

b. What company is in the position of having greatest liquidity?

c. Would you say that the three companies exhibit similar performance or quite different performance in terms of collecting receivables? Why do you think that might be?

d. Which company has the most rapid inventory turnover? Which company appears to be least efficient in terms of total asset turnover? Are your answers to those questions a little surprising? If a company is best at inventory turnover and worst at total asset turnover, what do you think that means?

Procter & Gamble

Colgate-Palmolive

Clorox

Sales

$65,237

$15,192

$5,878

Cost of goods sold

32,965

6,075

3,221

Receivable

4,726

1,403

515

Inventory

4,781

1,171

495

Total current assets

25,574

4,339

1,543

Total assets

117,037

12,131

4,572

Total current liabilities

28,890

3,310

2,045

(Note: All dollar values are in thousands.)

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