Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please conduct the ratio analysis (show me your formula and calculation for the full credit) and tell me for which company you are going to

Please conduct the ratio analysis (show me your formula and calculation for the full credit) and tell me for which company you are going to invest. Why?

Balance Sheet

Stanton Corp ABC Corp

Cash $50,000 $50,000

Accounts Receivables 100,000 200,000

Inventory 50,000 100,000

Current Assets 200,000 350,000

Fixed Assets 200,000 300,000

Other Non-current Assets 50,000 75,000

Non-Current Assets 250,000 375,000

Total Assets $450,000 $725,000

Accounts Payables $100,000 $100,000

Other Current Liabilities 50,000 100,000

Current Liabilities 150,000 200,000

Long-term Debt 100,000 225,000

Total Liabilities 250,000 425,000

Capital 200,000 300,000

Total Liabilities and Equity $450,000 $725,000

Income Statement

Stanton Corp ABC Corp

Sales Revenue $200,000 $300,000

COGS 100,000 150,000

Gross Profit 100,000 150,000

Selling and Administrative Expenses 30,000 50,000

Depreciation Expenses 10,000 10,000

EBIT 60,000 90,000

Interest Expense 10,000 20,000

Earnings Before Tax 50,000 70,000

Taxes 20,000 28,000

Earnings After Tax 30,000 42,000

(1) Current Ratio

(2) Quick Ratio

(3) Cash Ratio

(4) Net Profit Margin

(5) Operating Profit Margin

(6) Basic Earning Power

(7) ROE

(8) ROA

(9) Inventory Turnover Ratio

(10) DSO

(11) Fixed Assets Turnover Ratio

(12) Total Assets Turnover Ratio

(13) Debt Ratio

(14) Debt to Equity Ratio

(15) Liabilities-to-Assets Ratio

(16) Times Interest Earned Ratio

(17) Explain your decision on the investment based on the ratio analysis above in DETAIL.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions