What company is better in short-term and why

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Question
What company is better in short-term and why
Paragraph
Ratio
Analysi Formula
$20,245/ $11.245=1.8
current
Current
ratio
assets/ $48,750/ $50,450=0.9
Current
liabilities
Account Net sales/ 61.750/8100=7.6
Receivab Average
362.000/4120-87.8
le
accounts
Turnove
receivabl
r
e,
net
365/7.6-48
Average 365/
Collectio Account
n Period Receivable 365/87.8-4.15
Turnover
Inventor Cost of
Y
goods
Turnove sold/
Average
inventory
Days in
Average
Inventor inventory
Y
/ cost of
good
sold 365
current
net cash
Cash
provided
Debt
by
operating
Coverag activities/
average
current
liability
Profit Net
Margin
income/n
et sales
Al Pan
Otha da,
im Inc
1.8 0.9
7.6 87.8
48.02
4.15
4.97
0.8
73.3 428.5
0.45 0.50
0.05
0.03
Interpret
ation
39,900/8,020-4.97
27,680/32,500=0.8
8.020/39,900*365=73.
3
32.500/27,680*365=42
8
4900/11,245+10.300/2=
0.45
25.900/52,640+50.450/2=
0.50
3,245/61750-0.050
13,580/362,000=0.03
Transcribed Image Text:Paragraph Ratio Analysi Formula $20,245/ $11.245=1.8 current Current ratio assets/ $48,750/ $50,450=0.9 Current liabilities Account Net sales/ 61.750/8100=7.6 Receivab Average 362.000/4120-87.8 le accounts Turnove receivabl r e, net 365/7.6-48 Average 365/ Collectio Account n Period Receivable 365/87.8-4.15 Turnover Inventor Cost of Y goods Turnove sold/ Average inventory Days in Average Inventor inventory Y / cost of good sold 365 current net cash Cash provided Debt by operating Coverag activities/ average current liability Profit Net Margin income/n et sales Al Pan Otha da, im Inc 1.8 0.9 7.6 87.8 48.02 4.15 4.97 0.8 73.3 428.5 0.45 0.50 0.05 0.03 Interpret ation 39,900/8,020-4.97 27,680/32,500=0.8 8.020/39,900*365=73. 3 32.500/27,680*365=42 8 4900/11,245+10.300/2= 0.45 25.900/52,640+50.450/2= 0.50 3,245/61750-0.050 13,580/362,000=0.03
Asset Net sales/ 61,750/43,850+41,850
/2= 1.44
Turnove Average
total
assets
362,000/159,750+161,
250/2-2.25
Return
Net
3,245/41,850=0.077
on
income/t
Assets
otal
13,580/159,750=0.08
assets
Return
Net
3245-
income-
495/13,240+ 15450=
on
Preferred
Commo
0.19
dividend/A
Stockhol
verage
common
13,580-
der's
stockholde 3850/62480+71,450=0
Equity
rs
equity
1.44 2.25
0.077 0.08
Transcribed Image Text:Asset Net sales/ 61,750/43,850+41,850 /2= 1.44 Turnove Average total assets 362,000/159,750+161, 250/2-2.25 Return Net 3,245/41,850=0.077 on income/t Assets otal 13,580/159,750=0.08 assets Return Net 3245- income- 495/13,240+ 15450= on Preferred Commo 0.19 dividend/A Stockhol verage common 13,580- der's stockholde 3850/62480+71,450=0 Equity rs equity 1.44 2.25 0.077 0.08
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