The following financial results are shown for East, Inc. and West, Inc. Ratios Current ratio Acid...

 

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The following financial results are shown for East, Inc. and West, Inc. Ratios Current ratio Acid test ratio Accounts receivable turnover Inventory turnover Days sales in inventory Days sales uncollected Profit margin ratio Total asset turnover Return on common stockholder' East, Inc. 2.3 1.2 8.4 times 4.7 times 64 days 34.2 days 3.2% 1.1 4.6% West, Inc. 2.6 1.4 8.8 times 5.1 times 59 days 29.7 days 2.8% .9 4.1% equity Price earnings ratio 18.3 28.8 Dividend yield .89% .90 Debt ratio .62 .68 2.6 times 2.2 times Times interest earned From the above financial data, prepare two separate memos. In the first memo, determine which of the two companies would be the better short-term credit risk and explain why. In the second memo, determine which of the two companies the better investment is and explain why. Your explanations must mention the exact ratios and numbers compared to support your choice. The following financial results are shown for East, Inc. and West, Inc. Ratios Current ratio Acid test ratio Accounts receivable turnover Inventory turnover Days sales in inventory Days sales uncollected Profit margin ratio Total asset turnover Return on common stockholder' East, Inc. 2.3 1.2 8.4 times 4.7 times 64 days 34.2 days 3.2% 1.1 4.6% West, Inc. 2.6 1.4 8.8 times 5.1 times 59 days 29.7 days 2.8% .9 4.1% equity Price earnings ratio 18.3 28.8 Dividend yield .89% .90 Debt ratio .62 .68 2.6 times 2.2 times Times interest earned From the above financial data, prepare two separate memos. In the first memo, determine which of the two companies would be the better short-term credit risk and explain why. In the second memo, determine which of the two companies the better investment is and explain why. Your explanations must mention the exact ratios and numbers compared to support your choice.