The specific financial aspects to be considered with your analysis are:• Profit Margin• Total Owners' Equity.• Current Ratio.• Return on Equity.• Debt Equity Ratio.• Earnings per Share. Dammam Manufacturing Company is interested in investing in a new regionalproject beginning of 2020. There were three similar firms for potential investmentopportunity. The following financial information were available to help thecompany make the right decision:Financial Information 31/12/2019Firm AFirm B Firm CInformation from the income statement inSaudi Arabia Riyal (SAR):Total revenue10,099,0003,816,0001,277,550Total expenses9,503,000 3,618,0001,822,748Information from the balance sheet inSaudi Arabia Riyal (SAR):Current assets1,946,000 1,020,000 526,549Total assets8,668,000 8,183,000 3,783,127Current liabilities2,356,000 895,000 693,809Total liabilities4,587,000 5,944,000 3,089,318Total common stock outstanding225,800 389,000 168,238The three firms are competing within the same market segment. The ChiefExecutive Officer (CEO) of Dammam Manufacturing Company is studying thefinancial information of the three firms but he couldn't make a decision, so heasked you, as a financial expert to analyze and interpret specific financialaspects of the firms and recommend which firm should Dammam ManufacturingCompany invest in and why?

Ratio analysis help to understand the company liquidity, solvency and Profitability capacity.

The specific financial aspects to be considered with your analysis are: • Profit Margin • Total Owners' Equity. • Current Ratio. • Return on Equity. • Debt Equity Ratio. • Earnings per Share.

The specific financial aspects to be considered with your analysis are: • Profit Margin • Total Owners' Equity. • Current Ratio. • Return on Equity. • Debt Equity Ratio. • Earnings per Share.

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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Question

The specific financial aspects to be considered with your analysis are:
• Profit Margin
• Total Owners' Equity.
• Current Ratio.
• Return on Equity.
• Debt Equity Ratio.
• Earnings per Share.

Dammam Manufacturing Company is interested in investing in a new regional
project beginning of 2020. There were three similar firms for potential investment
opportunity. The following financial information were available to help the
company make the right decision:
Financial Information 31/12/2019
Firm A
Firm B Firm C
Information from the income statement in
Saudi Arabia Riyal (SAR):
Total revenue
10,099,0003,816,0001,277,550
Total expenses
9,503,000 3,618,0001,822,748
Information from the balance sheet in
Saudi Arabia Riyal (SAR):
Current assets
1,946,000 1,020,000 526,549
Total assets
8,668,000 8,183,000 3,783,127
Current liabilities
2,356,000 895,000 693,809
Total liabilities
4,587,000 5,944,000 3,089,318
Total common stock outstanding
225,800 389,000 168,238
The three firms are competing within the same market segment. The Chief
Executive Officer (CEO) of Dammam Manufacturing Company is studying the
financial information of the three firms but he couldn't make a decision, so he
asked you, as a financial expert to analyze and interpret specific financial
aspects of the firms and recommend which firm should Dammam Manufacturing
Company invest in and why?

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