Return on assets is an indicator of how profitable a

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management to put the fixed asset to work to generate sales. Return on assets is an indicator of how profitable a company is relative to its total assets. ROA gives an idea as to how efficient management is at using its assets to generate earnings. Return on common stockholders’ equity is the amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested. Current ratio is a liquidity ratio which provides a measure of a company’s ability to generate cash to meet is company needs. Current ratio indicates a company’s ability to satisfy is current liabilities with its current assets. Debt to total asset ratio is a metric used to measure a company's financial risk by determining how much of the company's assets have been financed by debt (Investopedia, 2013). 44
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The sizes of each company are Polo Ralph Lauren 56,000 employees, Nike 44,000 employees, and Adidas 31,334 employees. The products sold in each corporation all relate; Polo Ralph Lauren, apparel, home, accessories and fragrances; Nike Corporation, footwear, apparel, equipment, accessories and services; Adidas, footwear, sports related goods as well as other products such as bags, shirts, watches, and eyewear. All of the companies sale a range of the same types of products, we chose to focus primarily on each companies apparel. The company that we have chosen to be the best investment would be Nike Corporation. The reason we chose Nike Corporation is because by looking at their financial ratios we can tell that their company is able to stimulate profit as well as make use of their assets. According to the chart that we have formulated for the ratio calculations of 2011 (See Appendix A), Polo Ralph Lauren is doing better than Nike. However, we chose the company that we will invest in based off of what we see in society, financial reports, and financial ratios. Take a look at Nike Corporations profit margin ratio, and their current ratio they are shown to be a very profitable company. Ralph Lauren is as well but Nike has shown a pattern over the brink of two years which tells us that they are pretty consistent with being able to handle any risks that come along with their company. We also have evidence throughout the report to support our final analysis. You want to choose the company who is able to profit and stay away from as many risks as possible and Nike is the best choice. Conclusion In conclusion, after looking at the success of each one of the companies that we have analyzed we see that all of the companies seem to have some sort of financial stability. 45
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Nike has performed throughout its financial statements over the years to become a well- rounded corporation and this gives them a positive image to investors. We were able to apply what we have learned throughout the semester by computing financial ratios as well as being able to identify what’s on the balance sheet. The financial information provided throughout our financial report is how we came to the conclusion of Nike being
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Return on assets is an indicator of how profitable a...

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