Two companies are in the retail sales business, but their performance results are different, which is evidenced by the following data: Financial performance ratio Return on capital employed (ROCE) Return on ordinary share financing (ROSF) 30% Average debt collection period Average debt payment period Gross profit margin Net profit margin Average stock turnover period 20% 63 days 50 days 40% 10% 52 days Comp A Company B 17% 18% 21 days 45 days 15% 10% 25 days Perform the analysis of these data and describe the differences between these two companies. It is known that in one of them the work with consumers is well organised, while the other one is offering competitive prices. Which of these advantages are attributable to each company?
Two companies are in the retail sales business, but their performance results are different, which is evidenced by the following data: Financial performance ratio Return on capital employed (ROCE) Return on ordinary share financing (ROSF) 30% Average debt collection period Average debt payment period Gross profit margin Net profit margin Average stock turnover period 20% 63 days 50 days 40% 10% 52 days Comp A Company B 17% 18% 21 days 45 days 15% 10% 25 days Perform the analysis of these data and describe the differences between these two companies. It is known that in one of them the work with consumers is well organised, while the other one is offering competitive prices. Which of these advantages are attributable to each company?
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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Two companies are in the retail sales business, but their performance results are different, which is evidenced by the following data:
Financial performance ratio
Return on capital employed (ROCE)
Return on ordinary share financing (ROSF) 30%
Average debt collection period
Average debt payment period
Gross profit margin
Net profit margin
Average stock turnover period
20%
63 days
50 days
40%
10%
52 days
Comp A Company B
17%
18%
21 days
45 days
15%
10%
25 days
Perform the analysis of these data and describe the differences between these two companies. It is known that in one of them the work with consumers is well organised, while the other one is offering competitive prices. Which of these advantages are attributable to each company?
Transcribed Image Text:Two companies are in the retail sales business, but their performance
results are different, which is evidenced by the following data:
Financial performance ratio
Return on capital employed (ROCE)
Return on ordinary share financing (ROSF)
Average debt collection period
Average debt payment period
Gross profit margin
Net profit margin
Average stock turnover period
Company A Company B
20%
17%
30%
18%
63 days
50 days
40%
10%
52 days
21 days
45 days
15%
10%
25 days
D
Perform the analysis of these data and describe the differences
between these two companies. It is known that in one of them the
work with consumers is well organised, while the other one is offering
competitive prices. Which of these advantages are attributable to each
company?
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