The following ratios are available for toolmakers Stanley Black & Decker and Snap-On for a recent year:

Instructions
(a) Which company is more liquid? Explain.
(b) Which company is more solvent? Explain.
(c) Which company is more profitable? Explain.
Taking It Further
Stanley's price-earnings ratio is 19 times, compared with Snap-On's PE ratio of 12.4 times. Which company do investors favour? Is your answer consistent with your analysis of the two companies' profitability in (c)?

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Stanley Snap-On Current ratio Receivables turnover Operating cycle 137 days 155 days Debt to total assets 33.6% 6 2 Gross profit margin Return on equity 9.2%