For each ratio listed, identify whether the change in ratio value from the Prior Year to the Current Year is usually regarded asfavorable or unfavorable.RatioCurrent YearPrior YearChange1. Profit margin9%55 %7%54 %2. Debt ratio3. Gross margin36 %45 %4. Acid-test ratio5. Accounts receivable turnover6. Basic earnings per share1.201.235.06.3%241.201.087. Inventory turnover8. Dividend yield5.04.94.0 %3.8 %

Financial ratios help in judging the profitability, solvency, and activity of a business…

For each ratio listed, identify whether the change in ratio value from the Prior Year te favorable or unfavorable. Ratio Current Year Prior Year Change 1. Profit margin 9% 7% 54 % 2. Debt ratio 55 % 3. Gross margin 36 % 45 % 4. Acid-test ratio 1.20 1.23 5. Accounts receivable turnover 5.0 6.3 6. Basic earnings per share 1.20 $ 1.08 7. Inventory turnover 8. Dividend yield 5.0 4.9 4.0 % 3.8 % %24

For each ratio listed, identify whether the change in ratio value from the Prior Year te favorable or unfavorable. Ratio Current Year Prior Year Change 1. Profit margin 9% 7% 54 % 2. Debt ratio 55 % 3. Gross margin 36 % 45 % 4. Acid-test ratio 1.20 1.23 5. Accounts receivable turnover 5.0 6.3 6. Basic earnings per share 1.20 $ 1.08 7. Inventory turnover 8. Dividend yield 5.0 4.9 4.0 % 3.8 % %24

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Compare the Solvency, Liquidity and Profitability for the two companies
am.101.
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