Krystal's aunt was a shrewd businesswoman who believed in a diversified portfolio. Andy finds the results...
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Krystal's aunt was a shrewd businesswoman who believed in a diversified portfolio. Andy finds the results a bit confusing and is seeking your advice. Based on the ratios calculated, what problems might Andy encounter in comparing these companies? b. Briefly explain why the current and quick ratios for the utility and fast food stocks are so much lower than that for the other two companies. The water authority has a debt ratio of 0.63 whereas the software company has a zero debt ratio. Why is it okay for the water authority to carry a large amount of debt and not the software company? d. The software company has a superior profit margin when compared to the other companies. Why didn't Mrs. Doe invest all her money in the software company? a. C. Farissa Software Amar Water & Sewerage Authority Dennis Systems 6.75 Ratio Pizzaria Autos Current ratio 1.05 1.25 4.45 Quick ratio Debt ratio Net profit margin 0.85 0.77 5.15 3.65 0.63 0.41 0. 0.30 5.7% 13.8% 28% 7.9% Krystal's aunt was a shrewd businesswoman who believed in a diversified portfolio. Andy finds the results a bit confusing and is seeking your advice. Based on the ratios calculated, what problems might Andy encounter in comparing these companies? b. Briefly explain why the current and quick ratios for the utility and fast food stocks are so much lower than that for the other two companies. The water authority has a debt ratio of 0.63 whereas the software company has a zero debt ratio. Why is it okay for the water authority to carry a large amount of debt and not the software company? d. The software company has a superior profit margin when compared to the other companies. Why didn't Mrs. Doe invest all her money in the software company? a. C. Farissa Software Amar Water & Sewerage Authority Dennis Systems 6.75 Ratio Pizzaria Autos Current ratio 1.05 1.25 4.45 Quick ratio Debt ratio Net profit margin 0.85 0.77 5.15 3.65 0.63 0.41 0. 0.30 5.7% 13.8% 28% 7.9%
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Answer a If we analyze all four companies we will see that the Farissa software and Amar Auto system have higher current and faster rates than the oth... View the full answer
Related Book For
Accounting
ISBN: 978-1118608227
9th edition
Authors: Lew Edwards, John Medlin, Keryn Chalmers, Andreas Hellmann, Claire Beattie, Jodie Maxfield, John Hoggett
Posted Date:
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