Read the table below for 3 firms: a bubble tea store, a bike store, a consulting...

 

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Read the table below for 3 firms: a bubble tea store, a bike store, a consulting fim. COMPANY Debt-equity ratio 0.2 0.3 0.5 Inventory Turnover 4 60 ---- Current Ratio 1.8 0.9 1.28 Net profit margin 3.8% 6.4% 20% Receivables Turnover 30.0 6.0 (a) Distinguish cach company and discuss the reason for your identification. (12 marks) (b) Judge whether the following statement is true and explain your answer: "If the managers focus on the current stock value, they will tend to overemphasize short-term profits at the expense of long-term profits." (6 marks) Read the table below for 3 firms: a bubble tea store, a bike store, a consulting fim. COMPANY Debt-equity ratio 0.2 0.3 0.5 Inventory Turnover 4 60 ---- Current Ratio 1.8 0.9 1.28 Net profit margin 3.8% 6.4% 20% Receivables Turnover 30.0 6.0 (a) Distinguish cach company and discuss the reason for your identification. (12 marks) (b) Judge whether the following statement is true and explain your answer: "If the managers focus on the current stock value, they will tend to overemphasize short-term profits at the expense of long-term profits." (6 marks)

Answer rating: 100% (QA)

a Debtequity ratio The debttoequity ratio is a financial ratio indicating the relative proportion of shareholders equity and debt used to finance a co... View the full answer