Use the following information for the question(s) that follow. Patco and Ramsco are competitors in the same industry and have the followine Current ratio Debt/equity Total asset turnover Net profit margin Return on equity Dividend navout ratio Patco 1.2 0.60 2.6 5.2% 16.4% 15.0% Ramsco Industry Average 1.89 1.5 0.40 0.45 2.1 2.5 4.8% 5.0% 13.8% 15.0% 20.0% 22.0% OA. Ramsco is using leverage more aggressively than Patco. OB. Ramsco is reinvesting a higher percentage of its earnings in the busine C. Ramsco is using assets more efficiently than Patco. OD. Ramsco is more liquid than Patco.
Use the following information for the question(s) that follow. Patco and Ramsco are competitors in the same industry and have the followine Current ratio Debt/equity Total asset turnover Net profit margin Return on equity Dividend navout ratio Patco 1.2 0.60 2.6 5.2% 16.4% 15.0% Ramsco Industry Average 1.89 1.5 0.40 0.45 2.1 2.5 4.8% 5.0% 13.8% 15.0% 20.0% 22.0% OA. Ramsco is using leverage more aggressively than Patco. OB. Ramsco is reinvesting a higher percentage of its earnings in the busine C. Ramsco is using assets more efficiently than Patco. OD. Ramsco is more liquid than Patco.
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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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.
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Use the following information for the question(s) that follow.
Patco and Ramsco are competitors in the same industry and have the following ratios.
Current ratio
Debt/equity
Total asset turnover
Net profit margin
Return on equity
Dividend navout ratio
Patco
1.2
0.60
2.6
OO
5.2%
16.4%
15.0%
Ramsco
1.89
0.40
2.1
4.8%
13.8%
22.0%
Industry Average
1.5
0.45
2.5
5.0%
15.0%
20.0%
A. Ramsco is using leverage more aggressively than Patco.
B. Ramsco is reinvesting a higher percentage of its earnings in the business than Patco.
OC. Ramsco is using assets more efficiently than Patco,
D. Ramsco is more liquid than Patco.
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