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New Corporation an up - and - coming biotech company, provides the following selected financial statement information. Financial information for Benchmark Corporation a well -
New Corporation an upandcoming biotech company, provides the following selected financial statement information. Financial information for Benchmark Corporation a wellestablished biotech company whose financial ratios represent the goldstandard in the industry, is also provided.
New Corporation Benchmark Corporation
Cash and cash equivalents $ $ $ $
Shortterm investments
Accounts receivable
Property, plant and equipment
Intangible assets
Longterm investments
Total asset
Total liabilities
Total stockholders equity
Net sales $ $ $ $
Operating income
Interest expense
Investment income
Required:
Calculate the cash holdings ratio for both companies. What conclusions do you draw about the cash holdings of New Corporation?
Calculate the investmenttoassets ratio for both companies. What conclusions do you draw about the New Corporation level of investment?
Calculate the return on investments ratio for both companies. What conclusions do you draw about the riskiness of New Corporation investments?
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