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Ratio Analysis - Current ratio is a very important ratio...

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John Bieler Professor Carrigan Business 100-05 13 April 2007 Ratio Analysis Summary In a comparison between Ralph Lauren Corporation and J. Crew Incorporated it seems as though Ralph Lauren is the more ideal corporation. With the Ralph Lauren Corporation one receives a bigger bang for the buck, investment wise. Ralph Lauren’s earnings per share is two dollars greater than J.Crew’s. Moreover, Ralph Lauren awards their shareholders with a dividend. The Ralph Lauren Corporation has a much better return on total assets and total equity. Meanwhile, J. Crew Incorporated is losing return on their equity. Ralph Lauren Corporation seems to be more ideal in liquidity too.
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Unformatted text preview: Current ratio is a very important ratio. Both J. Crew and Ralph Lauren are between 1.5 and 1.65 which seem to be exceptional numbers. However, Ralph Lauren’s quick ratio, all other assets but inventory compared to total liabilities, is much better than J. Crew’s. Not only does Ralph Lauren have an outstanding perception in the market, but they also have the numbers to back it up. However, J. Crew exceeds Ralph Lauren in the category of asset utilization. There is an enormous difference in receivables turnover. It is around a dollar difference in inventory and total asset turnover. Bieler 1...
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