You have won $10,000 in the lottery and you decided to make your first investment in the

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Question:

You have won $10,000 in the lottery and you decided to make your first investment in the stock market. You are considering investing in the Retail sector and is evaluating two competitors Alpha & Beta. Below is a list of selected financial data for the two companies:

	Alpha	Beta
Current Assets	$60,239	$17,200
Total Assets	$199,581	$33,440
Current Liabilities	$64,619	$16,540
Total Liabilities	$115,970	$22,597
Income Available to Shareholders	$14,694	$2,377
Share Price	$65.39	$133.58
Weighted Average number of Common Shares	3207	430

Required

Part a-

For each company calculate and explain briefly the following ratios from a Liquidity, Solvency and Profitability perspective as applicable.

Current Ratio

Debt to Asset Ratio

Basic EPS

Price Earnings Ratio

Part b-

Assuming that both companies have Complex Equity structures what other ratio you will need to calculate to assess the profitability of each company for you as a potential investor . Explain in your own word the implications of that ratio.