Solution-Explain which company considered the better

Explain which company considered the better investment

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Question - The following table presents a selection of ratios for ScooterAir and Dolphin Airlines, two businesses that operate in the same industry:

	Scooter Air	Dolphin Airlines
Asset turnover	1 times	0.4 times
Debtors days	6.8 days	25.1 days
Current Ratio	0.59	0.89
Total debt to equity ratio	120.31%	250.89%
Profit margin	10.50%	4.32%
Quick Ratio	1.09	0.33
Return on equity (ROE)	22.4%	(35.7)%
Return on assets (ROA)	4.90%	1.42%

Required - Classify the above ratios into the categories of profitability, asset efficiency, liquidity and capital structure and compare the ratio results of the two entities. Based on your analysis, identify and explain which company would be considered the better investment.

Reference no: EM132559661

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Explain which company considered the better investment

Reference no: EM132559661

Reference no: EM132559661

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