Categorize each ratio as leverage liquidity or activity

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Assignment

Instructions:

You have done the market price analysis for two companies in one industry. Take the same companies and compute their following mentioned ratios for year 2014. Take year 2013 information as year beginning where it is required.

1. Return on Equity

2. Return on Assets

3. Average collection period

4. Inventory turnover ratio

5. Quick ratio

6. Debt to equity ratio

7. Debt ratio

8. Cash coverage ratio

9. Time interest earned ratio

10. Current ratio

11. Operating profit margin

12. DuPont Analysis for ROA

Required:

1. Categorize each ratio as leverage, liquidity, activity or profitability ratio.

2. Discuss you results about each ratio of both companies.

3. Present graphically and in tabular form the Market price analysis of both companies (from assignment 1)

4. Based on your findings from market analysis and ratio analysis which company you suggest is better for investment?

Reference no: EM13869852

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