Required: Use an Excel file to answer the following questions. Compute the following ratios for the companies’ 2014 fiscal years. (Use formulas): Current ratio Average days to sell inventory. (Use average inventory.) Debt to assets ratio. Return on investment. (Use average assets and use “earnings from continuing operations” rather than “net earnings.”) Gross margin percentage. Asset turnover. (Use average assets.) Net margin. (Use “earnings from continuing operations” rather than “net earnings.”) Plant assets to long-term debt ratio. Which company appears to be more profitable? Explain your answer and identify which ratio(s) from Requirement a you used to reach your conclusion. Which company appears to have the higher level of financial risk? Explain your answer and identify which ratio(s) from Requirement a you used to reach your conclusion. Which company appears to be charging higher prices for its goods? Explain your answer and identify which ratio(s) from Requirement a you used to reach your conclusion. Which company appears to be the more efficient at using its assets? Explain your answer and identify which ratio(s) from Requirement a you used to reach your conclusion.
Required: Use an Excel file to answer the following questions. Compute the following ratios for the companies’ 2014 fiscal years. (Use formulas): Current ratio Average days to sell inventory. (Use average inventory.) Debt to assets ratio. Return on investment. (Use average assets and use “earnings from continuing operations” rather than “net earnings.”) Gross margin percentage. Asset turnover. (Use average assets.) Net margin. (Use “earnings from continuing operations” rather than “net earnings.”) Plant assets to long-term debt ratio. Which company appears to be more profitable? Explain your answer and identify which ratio(s) from Requirement a you used to reach your conclusion. Which company appears to have the higher level of financial risk? Explain your answer and identify which ratio(s) from Requirement a you used to reach your conclusion. Which company appears to be charging higher prices for its goods? Explain your answer and identify which ratio(s) from Requirement a you used to reach your conclusion. Which company appears to be the more efficient at using its assets? Explain your answer and identify which ratio(s) from Requirement a you used to reach your conclusion.
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter9: Metric-analysis Of Financial Statements
Section: Chapter Questions
Problem 9.4.13P: Twenty metrics of liquidity, solvency, and profitability The comparative financial statements of...
Related questions
Question
Required: Use an Excel file to answer the following questions.
- Compute the following ratios for the companies’ 2014 fiscal years. (Use formulas):
Current ratio - Average days to sell inventory. (Use average inventory.)
- Debt to assets ratio.
Return on investment . (Use average assets and use “earnings from continuing operations” rather than “net earnings.”)- Gross margin percentage.
- Asset turnover. (Use average assets.)
- Net margin. (Use “earnings from continuing operations” rather than “net earnings.”)
- Plant assets to long-term debt ratio.
- Which company appears to be more profitable? Explain your answer and identify which ratio(s) from Requirement a you used to reach your conclusion.
- Which company appears to have the higher level of financial risk? Explain your answer and identify which ratio(s) from Requirement a you used to reach your conclusion.
- Which company appears to be charging higher prices for its goods? Explain your answer and identify which ratio(s) from Requirement a you used to reach your conclusion.
- Which company appears to be the more efficient at using its assets? Explain your answer and identify which ratio(s) from Requirement a you used to reach your conclusion.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning