Question
Refer to the following chart showing the days in sales in inventory. Company A Company B Company C Days sales in receivables 8.3 days 39.9
Refer to the following chart showing the days in sales in inventory.
| Company A | Company B | Company C |
Days sales in receivables | 8.3 days | 39.9 days | 60.3 days |
Days sales in inventory | 2.3 days | 45.8 days | 95.8 days |
Debt/equity ratio | 34.8% | 107.5% | 62.3% |
Times interest earned | 14.5 times | 7.8 times | 4.5 times |
Gross profit margin | 37% | 70% | 20% |
Price/earnings ratio | 15 | 3 | 18 |
Assign the correct company with the following questions:
1) If one of the companies above is McDonald's, one is Apple, and one is BMW Auto Sales, which is likely BMW? 2) Which company is best able to meet its interest obligations? 3) If one of the companies above sells primarily on net 45 day sales terms with no discount offered for early payment, which is it likely to be? 4) Assume one company is McDonald's, one is Wal-Mart, and the other is a high end jeweler, which is likely the jeweler? 5) Which company has the least percentage of assets financed by owners? 6) Which company apparently has investors worried about its future?
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