Question: Please solve fast. Urgent Below are selected ratios provided for the current year for two companies in the fast food industry, Gold Ltd. and Silver

 Please solve fast. Urgent Below are selected ratios provided for the
current year for two companies in the fast food industry, Gold Ltd.
Please solve fast. Urgent

Below are selected ratios provided for the current year for two companies in the fast food industry, Gold Ltd. and Silver Ltd.: Gold Silver $0.98 $1.37 Basic earnings per share Current ratio 2.2:1 2:1 Debt to total assets 56% 72% 78.8% 60.0% 5.8 times 9.9 times Gross profit margin Inventory turnover Price-earnings ratio Profit margin Receivables turnover 14.3 times 20.3 times 9.3% 12.2% 9.8 times 104 times Return on assets 9.3% 10.2% Times interest earned 12.3 times 6.9 times Instructions (a) Which company is more profitable (05 marks)? Describe your reasoning and identify any ratio(s) used to determine this (1 marks). (b) Which ratio(s) are used to assess inventory management (0.5 marks). Describe which company is managing their inventory better (1 marks)? (c) Which company is more solvent (0.5 marks)? Describe your reasoning and identify any ratio(s) used to determine this (1 marks) (d) Which company is more liquid (0.5 marks)? Describe your reasoning and identify any ratio(s) used to determine this (1 mark) (e) Which company do investors appear to believe has greater prospects for future growth (eg, stock price appreciation) (0.5 marks)? Which ratio(s), if any, did you use to reach this conclusion (0.5 marks)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!