Explain which company you would prefer to invest in and why.

Company 1

Current Ratio = 0.75

Acid Test Ratio = 50.775

A/R Collection Period = 25.98 Days

Average Sale Period = 51.20 Days

Total Asset Turnover = 0.58

Times Interest Earned Ratio = 10.78

Debt-to-Equity Ratio = 1.42

Gross Margin Percentage = 48.63%

Net Profit Margin Percentage = 5.76%

Return on Total Assets =8.60%

Return on Equity = 8.26%

Company 2

Current Ratio = 0.59

Acid Test Ratio = 30.05%

A/R Collection Period = 36.40 Days

Average Sale Period = 52.60 Days

Total Asset Turnover = 0.56

Times Interest Earned Ratio = 4.82

Gross Margin Percentage = 3.09

Net Profit Margin Percentage = 34.13%

Debt-to-Equity Ratio = 10.39%

Return on Total Assets = 30.56%

Return on Equity = 24.85%