Selected ratios for the current year for two companies in the beverage industry, Refresh Corp. and Flavour Limited, follow:

Instructions
(a) Both companies offer their customers credit terms of net 30 days. Indicate which ratio(s) should be used to assess how well the accounts receivable are managed. Comment on how well each company appears to be managing its accounts receivable.
(b) Indicate the ratio(s) used to assess inventory management. Which company is managing its inventory better?
(c) Refresh's current ratio is higher than that of Flavour. Identify two possible reasons for this.
(d) Which company, Refresh or Flavour, is more solvent? Identify the ratio(s) used to determine this, and defend your choice.
(e) You notice that Refresh's gross profit margin is higher and its profit margin lower than those of Flavour. Identify two possible reasons for this.
(f) What is mostly responsible for Flavour's higher return on assets: profit margin or asset turnover? Explain.
(g) What is mostly responsible for Flavour's higher return on common shareholders' equity: return on assets or use of debt? Explain.
(h) Refresh's payout ratio is significantly lower than that of Flavour. Indicate one possible reason for this.
(i) What is the market price per share of each company's common shares?
(j) Which company, Refresh or Flavour, do investors appear to believe has greater prospects for future growth (price appreciation)? Indicate the ratio(s) you used to reach this conclusion, and explain your reasoning.

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Asset turnover Basic earnings per share Current ratio Debt to total assets Dividend yield Earnings per share Gross profit margiın Inventory turnover Payout ratio Price-earnings ratio Profit margin Receivables turnover Return on assets Refresh Flavour 1.0 times $1.37 1.6:1 72% 1.1% $1.37 73.8%, 60.0% 5.8 times 9.9 times 10.0% 20.5% 14.3 times 20.3 times 10.2% 9.8 times 10.4 times 10.2% Return on common shareholders' equity 25.7% 29.8% 12.3 times6.9 times 1.0 times $0.98 2.2:1 56% 0.2% $0.98 9.3% 9.3% Times interest earned