Problem $13-5$B Comparative ratio analysis

Summary information from the financial statements of two companies competing in the same induatry follows.

Required

For both companies compute the $($c$)$ current ratio. $($b$)$ acid$-$test ratio. $($c$)$ accounts receivable tumover. $($d$)$ irventory turnover. $(8)$ days. sales in inventory. and $(f)$ days" sales uncollected Round to one decional place. Identifly the company you consider to be the better shontterm credit nist and expliain why.

For both companies compute the $($a$)$ proft margin ratio. $($b$)$ total asset furnover. $($o$)$ return on total assets, ard $($d$)$ return on equity. Assuming that each company paid cast dividends of $$1\mathrm{.}50$ per share and each company's stock can be purchased at $$25$ per share. compute their $(8)$ priceeamings ratios and $($f$)$ dividend yields. Round to one decimal place: for part b$.$ round to two decimats. Ideratify which campany's stock you would recormend as the better investraent and explain why.

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