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Ratio comparisons. Robert Avias reciently inhented a stock portfolio from his uncle. Wishing to learn more about the companies in which he is now invested,

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Ratio comparisons. Robert Avias reciently inhented a stock portfolio from his uncle. Wishing to learn more about the companies in which he is now invested, Robert performs a ratio analysis on each one and decides to compare them to one another, Some of his ratios are listed here. Assuming that his uncle was a wise investor who assembled the portfolio with care, Robert finds the wide diferences in these ratos confusing Help him out a. What problems might Rrobert encounter in comparing theso companies to one another on the basis of their ratios? b. Why might the current and quick ratios for the electric ufify and the fast-food stock bo so much lower than the same ratios for the other companies? c. Why might it be all right for the electro uthly to carry a large arrount of debt, but not the sofinare company? d. Why wouldrit investors invest all of their money in software compenies instead of in less profitable companies? (Focus on risk and retum) 3. What problems might Robert encourter in comparing these companies to one another on the basis of ther ratios? (Select at the answers that apply) 8. Cavion must be exercised when comparing older to newer frms, eg, usaty company vs. sotware company. C. The four companios are in very diflerent industres. D. Financial ratos from sotware companies are never very reliable. Data table (Click the icon here b in order to copy the contents of the data table below into a spreadsheet.)

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