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Please answer A through D thank you! Ratio comparisons Robart Arias recontly inherited a stock portfolio from his uncla. Wishing to tean more about the
Please answer A through D thank you!
Ratio comparisons Robart Arias recontly inherited a stock portfolio from his uncla. Wishing to tean more about the companies in which he is now inveated, Robert performs a raso anaigsis on each coe and decides to compare them to one another, Some of his ratios are lished here Assuming that his uncle was a wise investor who assembied the portfolio with care, Robert finds the wide diflerences in these ratios contusing. Haip Him out. a. What problems might Robert encourter in comparing these companies to one another on the basis of their ratios? b. Why might the current and quick ratios for the electric utily and the fast-food stock be so much lower than the same ratios for the oneer companies? c. Why might it be al right for the electric utiify to carry a iarge amount of debt, but not the software company? d. Why wouldmt imestors invest all of theie money in software companies inslead of in less profitable companies? (Focus on risk and retum.) a. What probiems might Robert encounter in comparing thase comparies to one another on the basis of their ratios? (Select all the answers that apply) A. The operating characteristcs of fems accoss different industies vary significantly resualing in very different ratio values. B. Causion must be exarcised when comparing older to newer firms, a g., velity company vs. software campany: C. Finandal ratios from solware companies are never very relisble. D. The four companies are in very diferent industries. Ratio comparisons Robart Arias recontly inherited a stock portfolio from his uncla. Wishing to tean more about the companies in which he is now inveated, Robert performs a raso anaigsis on each coe and decides to compare them to one another, Some of his ratios are lished here Assuming that his uncle was a wise investor who assembied the portfolio with care, Robert finds the wide diflerences in these ratios contusing. Haip Him out. a. What problems might Robert encourter in comparing these companies to one another on the basis of their ratios? b. Why might the current and quick ratios for the electric utily and the fast-food stock be so much lower than the same ratios for the oneer companies? c. Why might it be al right for the electric utiify to carry a iarge amount of debt, but not the software company? d. Why wouldmt imestors invest all of theie money in software companies inslead of in less profitable companies? (Focus on risk and retum.) a. What probiems might Robert encounter in comparing thase comparies to one another on the basis of their ratios? (Select all the answers that apply) A. The operating characteristcs of fems accoss different industies vary significantly resualing in very different ratio values. B. Causion must be exarcised when comparing older to newer firms, a g., velity company vs. software campany: C. Finandal ratios from solware companies are never very relisble. D. The four companies are in very diferent industries Step by Step Solution
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