S12-13. (Learning Objective 4: Analyzing a company based on its ratios) Take the role of an investment analyst at Standard Chartered. It is your job to recommend investments for your client. The only information you have is the following ratio values for two companies in the graphics software industry.

Write a report to the Standard Chartered’s investment committee. Recommend one company’s shares over the other. State the reasons for your recommendation.

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Ratio Days' sales in receivables.. Graphit.net Data Doctors 44 50 Inventory turnover........ 6 10 Gross profit percentage.. 69% 60% Net income as a percent of sales.... 13% 14% Times interest earned 17 11 Return on equity.. 36% 28% Return on assets. 15% 20%