finhomework2 - Ch3.12P Ratio Island electric Utility...

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Ch3.12P Ratio Island electric Utility Burger Heaven Fink Software Roland Motors Current ratio 1.1 1.3 6.8 4.5 Quick ratio 0.9 0.82 5.2 3.7 Debt ratio 0.68 0.46 0 0.35 Net profit Margin 6.20% 14.30% 28.50% 8.40% a) On the basis of these ratios Robert Arias can conculde these: 1) The liquidity of fink software is highest and Island Electric has the lowest liquidity. 2) However the inventory level of Burger Heaven is highest 3) Here debt ratio of fink software is least so we can say that liability=0 and earnings available to the common stock>fink software 4) Robert can not find out the earning per share and maket price from these ratios b) current ratio and quick ratio of island Electric and burger heaven < other companies 1) Because of the possibility of lower value of current assests. 2) Inventory level> other companies that is why quick ratio 3) Liabilities for island electric and burger heaven are higher than other companies and debt ratios are hi c)

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