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TAI is a manufacturing company while KIA is a software development company. As the financial analyst from Mzumbe University, you have been provided with the
TAI is a manufacturing company while KIA is a software development company. As the financial analyst from Mzumbe University, you have been provided with the followingfinancial ratios of the two companies TAI and KIA.
| DETAILS | TAI | KIA |
| ROCE | 25% | 60% |
| Operating ProfitMargin | 22% | 40% |
| Debt-Equity ratio | 70% | 35% |
| Current ratio | 2.5 | 4.00 |
| Quick ratio | 0.7 | 3.8 |
| Asset Turnover | 2.5 | 3.8 |
Required:
Compare and analyse financial ratios of the two companies above. Also, state if it makes any difference whether the company is a manufacturing company or a service-oriented company.
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