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The following financial information was obtained from the financial records of GREEN Company. Management is interested in comparing some financial results of GREEN Company to
The following financial information was obtained from the financial records of GREEN Company. Management is interested in comparing some financial results of GREEN Company to that of their main competitor, RED Company. Financial data of GREEN Company *** - Finance costs Pre-paid rent expense Total equity Marketable securities Profit for the year Cash Revenue Income tax expense Inventories Trade receivables Total current liabilities Mortgage Property, Plant and Equipment .... $ 25,000 30.000 279,000 70,000 77.000 5,000 920,000 22,000 85,000 39,000 120,000 280,000 450,000 Required: 1) For each of the 3 ratios below, calculate the ratio, and indicate if GREEN Company is better or worse than competitor RED Company by comparing to the indicated ratio already calculated for RED Company. (Round final answer to 2 decimals) (12 marks) Quick (Acid Test) ratio (RED Company - 1.88 times) Times Interest Earned ratio (RED Company - 8.26 times) Average Collection Period ratio (RED Company - 34.73 days) 2. From the financial information listed above for GREEN Company, identify and calculate the ratio that measures the profit yield earned for the shareholders on their investment, (Round final answer to 2 decimals)
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