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Calculate the following ratios for the LYL and MZM companies using the facts provided: 1) Acid Test, 2) Debt-to-Equity, 3) Profitability. They each produce chicken
Calculate the following ratios for the LYL and MZM companies using the facts provided: 1) Acid Test, 2) Debt-to-Equity, 3) Profitability. They each produce chicken feed. Show all work using a format like the grid I've attached. Then explain which company is the better investment.
LYL | MZM |
Cash $10,000 | Cash $15,000 |
Accounts Receivable $15,000 | Accounts Receivable $25000 |
Inventory $20,000 | Inventory $40,000 |
Current Liabilities $12,000 | Current Liabilities $20,000 |
Owner's Equity $25,000 | Owner's Equity $35,000 |
Net Income $50,000 | Net Income $75,000 |
Net Sales $500,000 | Net Sales $800,000 |
Answer Format:
LYL Asset Test Ratio | MZM Acid Test Ratio |
LYL Debt-to-Equity Ratio | MZM Debt-to-Equity Ratio |
LYL Profitability Ratio | MZM Profitability Ratio |
USE THE REST OF THE SPACE TO DESCRIBE WHICH COMPANY | IS THE BETTER INVESTMENT |
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