Financial Statement Analysis Following are selected ratios (in alphabetical order) for two competitors, Alpha and Omega. For each of the questions below, support your answer by referencing at least two ratios Ratio Acid test Asset turnover Current ratio Debt to total assets Gross profit margin interest coverage Inventory turnover Operating cycle Price-earnings ratio Profit margin Receivables turnover Return on assets Return on equity Alpha 0.6:1 1.0 times 1.6:1 56.00% 60.00% 12.3 times 5.8 times 98 days 20.3 times 9.30% 10.4 times 10.10% 25.70% Omega 0.8:1 1.0 times 2.2:1 72.00% 73.80% 6.9 times 9.9 times 74 days 14.3 times 10.20% 9.8 times 11.20% 29.80% 18 21 Question 25 (3 points) Which company is more solvent? Explain why. 24 o Format B I U ... 27 Question 26 (3 points) Which company do investors favour? Explain why. Format V BIU - .. Ea Oh > Question 27 (3 points) Which company is more profitable? Explain why. Format BIU EQSh 24 Question 28 (3 points) Which company is more liquid? Explain why. 27