Compare the two companies in the areas of liquidity, working capital management, profitability, financial leverage, and efficiency. What can you learn about these two companies? Ratio Company A Company B Current Ratio 0.91 0.83 Quick Ratio 0.29 0.24 Days’ Sales Outstanding 35 43 Inventory Turnover 6.54 12.23 Gross Margin Percentage 25.38 24.38 Return on Assets 7.61 6.26 Return on Equity 33.55 19.32 Return on Sales 4.9 8.5 Debt/Equity Ratio 158.17 73.12 Interest Coverage 11.04 10.07 Revenue per Employee 258,824 308,631
Compare the two companies in the areas of liquidity, working capital management, profitability, financial leverage, and efficiency. What can you learn about these two companies? Ratio Company A Company B Current Ratio 0.91 0.83 Quick Ratio 0.29 0.24 Days’ Sales Outstanding 35 43 Inventory Turnover 6.54 12.23 Gross Margin Percentage 25.38 24.38 Return on Assets 7.61 6.26 Return on Equity 33.55 19.32 Return on Sales 4.9 8.5 Debt/Equity Ratio 158.17 73.12 Interest Coverage 11.04 10.07 Revenue per Employee 258,824 308,631
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter7: Analysis Of Financial Statements
Section: Chapter Questions
Problem 1Q: Define each of the following terms:
Liquidity ratios: current ratio; quick, or acid test,...
Related questions
Question
Compare the two companies in the areas of liquidity,
Ratio |
Company A |
Company B |
|
0.91 |
0.83 |
Quick Ratio |
0.29 |
0.24 |
Days’ Sales Outstanding |
35 |
43 |
Inventory Turnover |
6.54 |
12.23 |
Gross Margin Percentage |
25.38 |
24.38 |
Return on Assets |
7.61 |
6.26 |
Return on Equity |
33.55 |
19.32 |
Return on Sales |
4.9 |
8.5 |
Debt/Equity Ratio |
158.17 |
73.12 |
Interest Coverage |
11.04 |
10.07 |
Revenue per Employee |
258,824 |
308,631 |
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