Requirement 1. Compute the ratios for both companies for the current year and decide which company's stock
Question:
Requirement 1. Compute the ratios for both companies for the current year and decide which company's stock better fits your investment strategy. Begin by computing the ratios, starting with the quick (acid-test) ratio. (Abbreviations used: Avg. = average, Cash* = cash and cash equivalents, Mkt = market, o/s = outstanding, SE = stockholders' equity, and ST = short-term.) a. Quick (acid-test) ratio Select the formula and then enter the amounts to calculate the quick (acid-test) ratios. (Round the ratios to two decimal places, X.XX.) ( + + ) / = Quick ratio Authority ( + + ) / = Browse ( + + ) / = b. Inventory turnover Select the formula and then enter the amounts to calculate the inventory turnover for each company. (Round the ratios to two decimal places, X.XX.) / = Inventory turnover Authority / = Browse / = c. Days' sales in average receivables Select the formula and then enter the amounts to calculate days' sales in average receivables for each company. (Use a 365-day year. Round intermediary calculations to the nearest whole number, X. Round your final answers to one decimal place, X.X.) / = Days' sales in average receivables Authority / = Browse / = d. Debt ratio Select the formula and then enter the amounts to calculate the debt ratio for each company. (Enter the debt ratio in decimal form to two decimal places, X.XX.) / = Debt ratio Authority / = Browse / = e.Times-interest-earned ratio Select the formula and then enter the amounts to calculate the times-interest-earned ratio for Browse.(Round the ratio to one decimal place, X.X.) / = Times-interest-earned ratio Browse / = f. Return on commonstockholders' equity Select the formula and then enter the amounts to calculate the return on common stockholders' equity (ROE) for each company. (Complete all answer boxes. If an account has a zero balance, enter a "0". Enter the ROE as a percentage rounded to the nearest one-tenth percent, X.X%.) ( ▼ - ) / = ROE Authority ( - ) / = % Browse ( - ) / = % g. Earnings per share of common stock Select the formula and then enter the amounts to calculate earnings per share (EPS) for each company. (Complete all answer boxes. If an account has a zero balance, enter a "0". Round EPS to two decimal places, X.XX.) ( ▼ - ) / = EPS Authority ( - ) / = Browse ( - ) / = h. Price-earnings ratio Select the formula and then enter the amounts to calculate the price-earnings (P/E) ratio for each company. (Enter amounts in the formula to two decimal places, X.XX, but then round the P/E ratios to one decimal place, X.X, as needed.) ▼ / = P/E ratio Authority / = Browse / = Which company's stock better fits your investmentstrategy? The common stock of ▼ seems to fit the investment strategy better. Its price-earnings ratio is ▼ , and ▼ . Choose from any list or enter any number in the input fields and then continue to the next question.
Introduction to Accounting An Integrated Approach
ISBN: 978-0078136603
6th edition
Authors: Penne Ainsworth, Dan Deines