Requirement 1(a):
Evaluation of company’s stock as investment: In general, financial ratios are used to evaluate capabilities, profitability, and overall performance of a company. The following are the ratios that evaluate the company’s stock as investment.
Financial Ratios: Financial ratios are the metrics used to evaluate the capabilities, profitability, and overall performance of a company.
To Compute: The ratio for 2018 and 2017.
Requirement 1(b):
To Compute: The cash ratio for 2018 and 2017.
Requirement 1(c):
To Compute: The times-interest earned ratio for 2018 and 2017.
Requirement 1(d):
To Compute: The inventory turnover ratio for 2018 and 2017.
Requirement 1(e):
To Compute: The gross profit percentage for 2018 and 2017.
Requirement 1(f):
To Compute: The debt to equity ratio for 2018 and 2017
Requirement 1(g):
To Compute: The
Requirement 1(h):
To Compute: The EPS for 2018 and 2017.
Requirement 1(i):
To Compute: The price/ earnings ratio for the years 2018 and 2017.
Requirement 2 a:
To Decide: Whether T has the ability to pay the debt.
Requirement 2 b:
To Explain: Whether the common stock increased or decreased due to attractiveness.
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Horngren's Financial & Managerial Accounting, The Managerial Chapters, Student Value Edition (6th Edition)
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