1. Financial ratios of the two firm Brad Inc. and Vicky Inc. are given. For each ratio, which company is performing better or worse and why?

Overall, which company do you think is performing better

For Brad Inc. Current Ratio = Current Assets/Current Liabilities =183000/ 127500 =1.435294 For Vicky Inc. =4,80,000.00/2,85,000.00 =1.684211 a. Days Sales in Inventory For Brad Inc. Days Sales in Inventory: (cost of average inventory/cost of goods sold)/365 (Brad) = (67500/150,000) *365 = 164.25 For Vicky Inc. Days Sales in Inventory: (cost of average inventory/cost of goods sold)/365 = (195000/285000) *365 = 249.7368 b. Days Sales in Receivables For Brad Inc. Days Sales in Receivables: (account Receivables/Revenue) *365 (Brad) = (40500/375000) *365 = 39.42 For Vicky Inc Days Sales in Receivables: (account Receivables/Revenue) *365 (Vicki) = (90000/825000) *365 = 39.81818 c. Gross Profit Margin For Brad Inc. Gross Profit Margin: Revenue - cost of goods sold =375000-150000 = 225000 For Vicky Inc. Gross Profit Margin: Revenue - cost of goods sold =825000-285000 = 540000 d. Profit Margin For Brad Inc Profit Margin: Net Income/Sales = 22,500/3,75,000 =6% For Vicky Inc. Net Income/Sales: 64,800/8,25,000