QUESTION 12 (8 Marks, 14 Minutes) Uisted below are the ratio values for two companies that operate in the same industry and sell products at similar prices. Please answer questions below each ratio. Company 1 10% Company2 15% Return on equity Debt to total assets Return on assets Profit margin on sales Asset turnover Inventory turnover Receivables turnover Times interest earned 4.2% 1.2 10 50% 1.0 1.8 .2 .6 12 Price to earnings Indicate your answer in this column by placing a 1 for Co. 1 or a 2 for Company 2 a) Which company collects its accounts receivable faster? b) Which company sells its inventory faster? both companies, non-current assets represent 90% of all assets, which company has the newest non-current assets? d)Which company is the most able to meetits interest payment commitments to creditors? e) Which [ Which company has the most debt? g) Which company's profit margin on sales is more attributable to controlling its operating expenses? h) If i company pays out the largest dividend relative to its earnings? b) f Interest rates are going t all,which company's stock would you buy2 Inventory turnover Cost of goods sold Average inventory Net income - Pref. div Avg. Common Equity Return on equity turnover Net sales Total debt Total assets Debt to total assets Average net AR Times Interest Earned (TIE) Net income Average total assets EBIT Interest expense Return on assets Payout ratio Profit margin on sales Cash Dividends Net income Net income Net sales Common share price Earnings per share Price earnings Net sales Average total assets Asset turnover