The Financial statements of X, Y and Z are being compared and the following data are given:

X Y Z

Current ratio 200% 50% 100%

Acid-test ratio 100% 30% 60%

Rate of return on sales 30% 60% 40%

Retained earnings to

capital stock 60% 300% 100%

Price earnings ratio 3 2 5

Debt-equity ratio 60% 150% 200%

Net cash inflow (outflow) from:

Operating activities (P10,000) (P5000) (P25000)

Investing activities 30,000 20,000 (8000)

Financing activities 50,000 10,000 8,000

Disregarding all other factors, answer the following questions and show solutions.

1. Which company must be having difficulty in meeting its current obligations?
2. which company should declare stock dividend?
3. in extending credit, priority should be given to?
4. which company incurred a net loss?