nterpreting liquidity and activity ratios The table. shows key financial data for three firms that compete in the consumer products market Procter & Gamble, Colgate-Palmolive, and Clore a. Calculate each of the following ratios for all three companies: current ratio, quick ratio, inventory tumover, average collection period, total asset turnover b. What company is in the position of having greatest liquidity? c. Would you say that the three companies exhibit similar performance or quite different performance in terms of collecting receivables? Why do you think that might be? d. Which company has the most rapid inventory turnover? Which company appears to be least efficient in terms of total asset turnover? Are your answers to those questions a little surprising? If a company is best at inventory tumover and worst at total asset tumover, what do you think that means? CHILD a. For the three companies, the current ratios are: (Round to three decimal places) Procter and Gamble Colgate-Palmolive Current ratio Clorox

Q: What is Balanace of Payment

A: Balance of Payment is a statement of monetary transactions made and records  between residents of a…

Q: Utility expense

A: Energy, water, and trash disposal are all utilities that are used in the home or business and incur…

Q: DEFINE credit policy

A: Credit policy is the set of policies governing a company’s credit sales, outstanding amounts;…

Q: Working Capital

A: Working capital = Current Assets - Current Liabilities  We know that current assets and current…

Q: Type of CPM Loan?

A: Introduction: CPM refers to constant payment mortgage, this is nothing but an arrangement…

Q: What means Finance?

A: The term finance means the management of cash and incorporates activities like, projecting, savings,…

Q: What does financing activities includes?

A: Cash Flow Statement:   It is a financial statement prepared by a company to report their cash…

Q: Define Purchase return.

A: Financial accounting is the process of recording, summarizing, and reporting all the transactions in…

Q: Define credit enhancement

A: Borrowings are the liability of the company which is used to finance the requirement of the funds.…

Q: Define Interest cost.

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Financial Ratios

A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.

Return on Equity

The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.