Which company is more liquid? Which company is more solvent?Which company is more profitable?

0:00 AM / Remaining: 161 min. FULL SCREEN PRINTER VERSION BACK NEXT Question 31 Doug, Bev, Emily, and Daniel have sold their shares of ABC Ltd. to Software Solutions Inc., a public company. One of the terms of the sale agreement was that Emily and Daniel remain employees of Software Solutions for the next two years and continue to operate the business. Emily and Daniel are now operating ABC as a wholly owned subsidiary of Software Solutions. Daniel and Emily have received a sizable amount of cash from the sale of their shares of ABC. As a result, they are considering where they should invest this money. They recognize how profitable ABC continues to be as a subsidiary of Software Solutions and are considering investing some of their excess cash in Software Solutions. They have accumulated a number of ratios for Software Solutions Inc., and Micro Inc. (a publicly traded competitor of Software Solutions), in addition to the overall industry to enable them to make a decision on whether or not they should invest in Software Solutions. Software Ratio Solutions Inc. Micro Inc. Industry Ratio Current ratio 1.9 :1 1.1 :1 1.5 :1 Receivables turnover 5.2 times 6.3 times 6.1 times Inventory turnover 13.3 times 17.9 times 18.0 times Debt to total assets 35.8 % 31.5 % 35.0 % Times interest earned 10.8 times 11.7 times 12.4 times Gross profit margin 43.0% 24.0 % 24.9 % Profit margin 20.9 % 14.3 % 13.2 % Return on assets 11.3 % 9.6% 8.9% Return on common shareholders' equity 21.9% 17.9% 16.5% Dividend yield 1.7% 1.3 % 1.5 % Price-earnings ratio 12.5 times 14.8 times 9.5 times Which company is more liquid