36. Which company has the most risk from an investor's standpoint? Firm A has a PE of 92 times and Firm B has a PE of 16 times. Assume both firms operate in the same industry. Firm A has fewer shares outstanding than Firm B. A. Firm A because it has the higher PE ratio. B. Firm B because it has a lower PE ratio. C. Firm A because it has fewer shares outstanding. D. Firm B because it has more shares outstanding. 37. A firm that is efficient in inventory management will have A. a high inventory turnover ratio and a low days sales in inventory ratio B. a low inventory turnover ratio and a low days sales in inventory ratio C. a high inventory turnover ratio and a high days sales in inventory ratio D. a low inventory turnover ratio and a high days sales in inventory ratio 38. This ratio measures the number of dollars of operating earnings available to meet each dollar of interest obligatio on the firm's debt. A. Fixed charge coverage ratio B. Times interest earned C. Cash coverage ratio D. ROA 39. Which of the following statements is correct? A. A low average payment period and a high accounts payable turnover are a sign of good management. B. A high average payment period and a low accounts payable turnover are a sign of good management C. A high average payment period and a high accounts payable turnover are a sign of good management. 11. if 0. An analyst computes the following ratios for Iridescent Carpeting Inc. and compares the results to the industry averages: FINANCIAL RATIO Current Ratio Net Profit Margin Return on Equity Times Interest Eamed IRIDESCENT CARPETING 2.3x 22% 17% 4.7x INDUSTRY AVERAGE 1.8x 24% 20% 4.1x Based on the above data, which of the following can the analyst conclude? Iridescent Carpeting: A. has better short-term liquidity than its competitors. B. has stronger profitability than its competitors. C. is most likely a younger company than its competitors. D. All of these statements are correct