Use the ratios below to answer the following questions. You must support and be sure to...
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Use the ratios below to answer the following questions. You must support and be sure to consider all relevant ratios. A B Return on assets (%) 7.4% 13.9% 12.8% Profit margin (%) 8.2% 5.3% 13.3% Gross margin (%) 43.2% 37.9% 28.7% Total liabilities to equity (%) 113.6% 52.5% 86.7% Fixed-asset turnover (x) 1.15 2.83 1.42 Inventory turnover (x) 9.49 19.25 5.90 Days' sales in cash (days) 7.14 9.20 14.50 Collection period (days) 46.4 90 28.3 Times interest earned (x) 1.2 5.8 10.8 Current ratio (x) 1.76 2.61 2.24 Cash Flow Margin (%) 2.3% 9.7% 1.3% Financing Cash Flow 75,000 (58,000) 12,000 Investing Cash Flow (38,000) (24,000) 18,000 a) Which company is most liquid? You must support your answer b) Which company is least solvent? You must support your answer. c) Which company the most efficient at generating sales with its assets? What is its asset turnover? d) What is Company C's return on equity? e) Which company appears to be borrowing money to expand and grow? Use the ratios below to answer the following questions. You must support and be sure to consider all relevant ratios. A B Return on assets (%) 7.4% 13.9% 12.8% Profit margin (%) 8.2% 5.3% 13.3% Gross margin (%) 43.2% 37.9% 28.7% Total liabilities to equity (%) 113.6% 52.5% 86.7% Fixed-asset turnover (x) 1.15 2.83 1.42 Inventory turnover (x) 9.49 19.25 5.90 Days' sales in cash (days) 7.14 9.20 14.50 Collection period (days) 46.4 90 28.3 Times interest earned (x) 1.2 5.8 10.8 Current ratio (x) 1.76 2.61 2.24 Cash Flow Margin (%) 2.3% 9.7% 1.3% Financing Cash Flow 75,000 (58,000) 12,000 Investing Cash Flow (38,000) (24,000) 18,000 a) Which company is most liquid? You must support your answer b) Which company is least solvent? You must support your answer. c) Which company the most efficient at generating sales with its assets? What is its asset turnover? d) What is Company C's return on equity? e) Which company appears to be borrowing money to expand and grow?
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a The most liquid company can be determined by analyzing the current ratio days sales in cash and co... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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