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I have attached the profitability, liquidity and solvency ratios for Apple Inc (their competitor Microsoft is also included). and need help with answering the questions
I have attached the profitability, liquidity and solvency ratios for Apple Inc (their competitor Microsoft is also included). and need help with answering the questions listed below.
Profitability Ratios | 2018 | 2019 | 2020 | Microsft (2020) | Industry | |
Net Profit Margin Ratio | 25.02% | 27.13% | 26.03% | 35.90 | 13.36 | |
Total Asset Turnover | 0.62 | 0.63 | 0.68 | 0.47 | 0.8 | |
Return on Assets | 15.45% | 17.14% | 17.74% | 18.08 | 7.06 | |
Operating Income Margin | 1.04 | 1.06 | 1.07 | 41.55 | 16.5 | |
Sales to Fixed Assets | 5.47 | 5.72 | 6.00 | 0.54 | 7.06 | |
ROE | 52.74% | 64.14% | 87.93% | 42.19 | 14.67 | |
Return on Common Equity | 140.56% | 128.47% | 113.14% | 69.4 | 17.68 | |
Gross Profit Margin | 1.24 | 1.22 | 1.18 | 67.05 | 40.08 |
Long-Term Solvency or Financial Leverage | 2018 | 2019 | 2020 | Microsoft (2020) | Industry | |
Times Interested Earned | 21.93 | 17.69 | 22.74 | 20.44 | 18.69 | |
Fixed Charge Coverage | 17.42 | 14.48 | 16.34 | 12.44 | 16.05 | |
Debt Ratio | 0.39 | 0.42 | 0.47 | 0.37 | 0.26 | |
Debt: Equity Ratio | 2.41 | 2.74 | 3.96 | 1.55 | 0.21 |
Liquidity Ratios | Company | Competitor | Industry | |||
Short-Term Debt Paying Ratios | 2018 | 2019 | 2020 | Microsoft (2020) | Technology | |
Working Capital | 1.123842692 | 1.540125617 | 1.363604448 | 2.515765454 | 2.29 | |
Current Ratio | 1.123842692 | 1.540125617 | 1.363604448 | 2.515765454 | 2.29 | |
Acid Test Ratio | 1.089991957 | 1.501286441 | 1.325072112 | 2.49 | 1.80 | |
Cash Ratio | 0.5630465662 | 0.951181445 | 0.8629023076 | 1.89 | 0.96 |
- Assess the significant trends you see for the company's profitabilityby discussing how the net profit margin affects return on assets, and how the depreciation of assets affects the profitability ratios.
- Discuss whether the profitability ratios you calculated support your previous analysis of liquidity and solvency ratios. Include discussion of whether the company you are reporting on would be considered a good investment.
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