In Table 3.5, a majority of the firms listed have current ratios that fall below their industry average. Why? One exception to this general pattern is Dillard’s, which is an upscale department store chain. Why might Dillard’s operate with greater-than-average liquidity?

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TABLE 3.5 Financial Ratios for Select Firms and Their Industry Average Values Times interest Net earned profit ratio margin Builders FirstSource Home Depot Lowe's Building materials Apple Cisco Systems IBM Computers Chipotle Texas Roadhouse Wendy's Eating and drinking Dillard's Nordstrom Target Walmart Merchandise stores All Industries Average collection Total asset Current Quick Inventory period Debt Debt- ratio ratio turnover (days) turnover ratio to-equity 1.6 0.9 9.1 35.0 2.4 0.8 1.1 0.2 5.1 7.0 2.3 1.1 1.0 0.1 3.8 2.0 1.0 1.6 1.2 12.6 8.0 7.6 0.7 1.6 1.4 36.5 52.0 0.7 0.7 1.8 1.6 12.2 64.0 0.5 0.6 1.0 0.9 24.3 129.0 0.6 0.9 2.0 1.1 14.6 17.0 2.9 0.6 1.6 1.5 182.5 6.0 1.5 0.7 0.6 0.5 91.3 13.0 1.6 0.5 1.6 1.2 365.0 27.0 0.4 0.9 0.6 0.4 121.7 3.0 3.6 0.8 2.0 0.4 2.8 3.0 1.9 0.5 0.9 0.3 4.0 1.8 0.8 0.9 0.3 2.1 1.8 0.7 0.8 0.2 2.3 0.7 1.3 0.2 6.1 0.6 1.6 1.0 1.7 0.6 - 6.1 8.9 4.0 16.6 1.0 17.4 13.0 2.9 35.5 3.0% 7.2% 13.3 10.2% 23.5% 8.8 5.9% 11.8% 152.5% 11.0 5.3% 28.8% 20.5 21.5% 15.1% 20.4 8.6 3.4 - 19.0 1.5 2.8 1.5 6.3 1.0 2.0 1.1 8.7 1.3 1.0 8.0 2.6 1.9 2.0 1.0 Return Return on on total common assets equity 31.2% 2.4 3.4 67.6% 55.5% 21.4% 10.7% 29.0% 12.2% 7.3% 49.7% 3.1% 5.8% 7.2% 6.3% 9.5% 22.4% 6.3% 10.1% 18.4% 8.0% 3.2% 23.5% 2.6% 7.9% -12.3% 3.9 1.8% 3.4% 3.8 3.2% 5.8% 9.8 4.2% 7.7% 9.9 2.8% 6.4% 6.5 2.4% 15.1% 1.9 3.3% 2.4% 6.7% 53.6% 27.7% 18.5% 40.4% 3.2%