Question
(TCO G) Please review the following 6 ratios for Langley Company and XYZ Inc. for the year ended 2014, and address the 2 questions below.
(TCO G) Please review the following 6 ratios for Langley Company and XYZ Inc. for the year ended 2014, and address the 2 questions below.
Ratio Name | Langley Company | XYZ Inc. |
(a) Rate of return on total assets | 21.5% | 17.9% |
(b) Debt ratio | 25.0% | 10.1% |
(c) Accounts receivable turnover | 8.3 | 7.5 |
(d) Price-Earnings ratio | 25 | 19 |
(e) Inventory turnover | 6.1 | 5.2 |
(f) Current ratio | 1.96 | 3.12 |
Instructions: This is a 2-part question.
(1) Explain the meaning of each of the Langley Company ratios above. (18 points) (2) State which company performed better for each ratio. (18 points) (Points : 36)
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