Below are selected ratios for two companies in the same industry, along with industry average: Can we
Question:
Below are selected ratios for two companies in the same industry, along with industry average:
Can we say on the basis of above ratios and information that company B is better than company A because its ratios are better in six out of eight areas (all except stock turnover and rate of return on total assets)? The company B is better than the industry average in the same six categories.
Transcribed Image Text:
Ratios Current ratio Acid-test ratio Debt-asset ratio Operating expenses ratio Number of times interest earned Stock turnover Debtors turnover Rate of return on total assets A 221 121 36 18 6 8.5 11.0 17 B 561 301 5 17.5 12 6.5 15.0 10 Industry 241 131 35 20 5 7.0 11.4 13.5
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Management Accounting Text Problems And Cases
ISBN: 9781259026683
6th Edition
Authors: M Y Khan, P K Jain
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