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Explain the meaning of each of the simpson company ratios

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Reference no: EM132456563

Problem - Please review the following 6 ratios for Simpson Company and ABC Inc. for the year ended 2014, and address the 2 questions below.

Ratio Name

Simpson Company

ABC Inc.

(a) Days' sales outstanding

36

30

(b) Inventory turnover

5.6

4.9

(c) Asset turnover

2.02

3.03

(d) Earnings per share

$1.50

$1.25

(e) Times-interest-earned

6.1

5.2

(f) Return on common stockholders' equity

15.6%

12.2%

Required -

(1) Explain the meaning of each of the Simpson Company ratios above.

(2) State which company performed better for each ratio.

Reference no: EM132456563

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