The following ratios for The A2 Milk Limited and Synlait Limited were calculated for 2020 and 2019: A2 Milk Ltd. Synlait Ltd. 2020 2019 2020 2019 Return on Assets 44.52% 48.54% 9.33% 12.81% Return on Equity 40.15% 42.83% 13.69% 17.93% Current Ratio 3.69 times 3.15 times 1.00 times 0.76 times Days in Inventory 61 days 54 days 72 days 68 days Debt ratio 21.97% 21.76% 59.36% 57.20% Based on the above ratios, comment on A2 Milk Ltd’s short term and long term financial risk
The following ratios for The A2 Milk Limited and Synlait Limited were calculated for 2020 and 2019: A2 Milk Ltd. Synlait Ltd. 2020 2019 2020 2019 Return on Assets 44.52% 48.54% 9.33% 12.81% Return on Equity 40.15% 42.83% 13.69% 17.93% Current Ratio 3.69 times 3.15 times 1.00 times 0.76 times Days in Inventory 61 days 54 days 72 days 68 days Debt ratio 21.97% 21.76% 59.36% 57.20% Based on the above ratios, comment on A2 Milk Ltd’s short term and long term financial risk
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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The following ratios for The A2 Milk Limited and Synlait Limited were calculated for 2020 and 2019:
|
|
A2 Milk Ltd. |
Synlait Ltd. |
||
|
|
2020 |
2019 |
2020 |
2019 |
|
|
44.52% |
48.54% |
9.33% |
12.81% |
|
|
40.15% |
42.83% |
13.69% |
17.93% |
|
Current Ratio |
3.69 times |
3.15 times |
1.00 times |
0.76 times |
|
Days in Inventory |
61 days |
54 days |
72 days |
68 days |
|
Debt ratio |
21.97% |
21.76% |
59.36% |
57.20% |
Based on the above ratios, comment on A2 Milk Ltd’s short term and long term financial risk
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