given the opportunity, in which of the firms would you invest based on the result of your analysis of both companies and the comparison with the industry? If you would not invest, explain your reasons according to the results obtained.
If given the opportunity, in which of the firms would you invest based on the result of your analysis of both companies and the comparison with the industry? If you would not invest, explain your reasons according to the results obtained.
|
Company Name: |
Year 2018 |
Chemicals and Allied Products Industry Ratios |
|
|
………….. |
|||
|
Solvency or Debt Ratios |
Merck |
J&J |
2018 |
|
Debt ratio |
0.67 |
0.61 |
0.47 |
|
Debt-to-equity ratio |
0.93 |
0.51 |
0.38 |
|
Interest coverage ratio |
12.27 |
18.91 |
-9.43 |
|
Liquidity Ratios |
|
|
|
|
Current ratio |
1.17 |
1.47 |
3.47 |
|
Quick ratio |
0.92 |
1.16 |
2.12 |
|
Cash ratio |
0.40 |
0.63 |
2.24 |
|
Profitability Ratios |
|
|
|
|
Profit margin |
14.64% |
18.75% |
-93.4% |
|
ROE ( |
23.03% |
25.60% |
-248.5 |
|
ROA ( |
7.49% |
10.00% |
-146.5 |
|
Gross margin |
68.06% |
66.79% |
55.3% |
|
Operating margin (Return on sales) |
19.62% |
24.27% |
-42.9% |
|
Activity or Efficiency Ratios |
|
|
|
|
Asset turnover |
0.51 |
0.53 |
1.08 |
|
Receivables turnover (days) |
61.02 |
63 |
16 |
|
Inventory turnover (days) |
146.98 |
129 |
36 |
|
Price Ratios |
|
|
|
|
Dividend Payout Ratio |
0.84 |
0.62 |
0.15 |
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