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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

Fundamentals of Financial Management, Concise Edition (MindTap Course List)
Fundamentals of Financial Management, Concise Edition (MindTap Course List)
9th Edition
ISBN:9781305635937
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Eugene F. Brigham, Joel F. Houston
Chapter4: Analysis Of Financial Statements
Section: Chapter Questions
Problem 7DQ: From the Google Finance site, use the DuPont analysis to determine the total assets turnover ratio...
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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

 

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