Use the information in the following table to answer this question Ratio Company A Current Ratio...

 

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Use the information in the following table to answer this question Ratio Company A Current Ratio 2.0 to 1.0 Accounts receivable turnover 20.0 times Inventory turnover 10.0 times Net profit margin 12.4% Return in total assets 20.0% Return on common 26% stockholders' equity Company B 2.0 to 1.0 15.5 times 5.5 times 17.5% 27.0% 35.2% Based on the above information explain which company you consider to be better than the other in terms of (make sure you give at least one example of your answer for each ratio): 1. Liquidity and assets utilization Profitability II. Use the information in the following table to answer this question Ratio Company A Current Ratio 2.0 to 1.0 Accounts receivable turnover 20.0 times Inventory turnover 10.0 times Net profit margin 12.4% Return in total assets 20.0% Return on common 26% stockholders' equity Company B 2.0 to 1.0 15.5 times 5.5 times 17.5% 27.0% 35.2% Based on the above information explain which company you consider to be better than the other in terms of (make sure you give at least one example of your answer for each ratio): 1. Liquidity and assets utilization Profitability II.

Answer rating: 100% (QA)

Question I In terms of liquidity both the companies are at par whereas in terms of assets utilization company A has a better performance compared to company B because The current ratio CR is same for ... View the full answer