Compare the performance of both companies with each other, for each of the calculated indicators and determine if it is necessary to make any adjustment or adjustments to better position the firm with the lowest performance, facing the end of the next fiscal year. Explain what adjustments you propose and why.
Compare the performance of both companies with each other, for each of the calculated indicators and determine if it is necessary to make any adjustment or adjustments to better position the firm with the lowest performance, facing the end of the next fiscal year. Explain what adjustments you propose and why.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Compare the performance of both companies with each other, for each of the calculated indicators and determine if it is necessary to make any adjustment or adjustments to better position the firm with the lowest performance, facing the end of the next fiscal year. Explain what adjustments you propose and why.
Transcribed Image Text:Chemicals and
Company Name:
Allied
Products
Y ear 2018
Industry
Ratios
Solvency or Debt Ratios
Merck
J&J
2018
Debt ratio 0.67
Debt-to-equity ratio 0.93
0.61
0.47
0.51
0.38
Interest coverage ratio 12.27
18.91
-9.43
Liquidity Ratios
Current ratio 1.17
Quick ratio 0.92
Cash ratio 0.40
1.47
3.47
1.16
2.12
0.63
2.24
Profitability Ratios
Profit margin 14.64% 18.75%
-93.4%
ROE (Return on equity), after tax
23.03%
25.60%
-248.5
ROA (Return on assets) 7.49%
10.00%
-146.5
Gross margin 68.06% 66.79%
Oper ating margin (Return on sales) 19.62% 24.27%
55.3%
42.9%
Activity or Efficiency Ratios
Asset turnover 0.51
Receivables turnover (days) 61.02
0.53
1.08
63
16
Inventory turnover (days) 146.98
129
36
Price Ratios
Dividend Payout Ratio 0.84
0.62
0.15
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education