The following ratios are available for beverage competitors DAVIDsTEA Inc. and Starbucks Corporation for a recent year:

Instructions
(a) Which company is more liquid? Explain.
(b) Which company is more solvent? Explain.
(c) Which company is more profitable? Explain.
TAKING IT FURTHER
The price-earnings ratio for DAVIDs TEA is 54.8 times, compared with Starbucks' price- earnings ratio of 27.4 times. Which company do investors favour? Is your answer consistent with your analysis of the two companies' profitability in part (c)?

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DAVIDsTEA Inc. ion Current ratio 8 Inventory turnover Operating cycle 82.4 times 5.4 times 72 days assets Interest coverage 3.6 times Gross profit margin 2.0 times 9.2% 1.5 times Return on assets