Analyze the meaning of each of the langley company ratios

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Problem

Review the following 6 ratios for Langley Company and XYZ Inc. for the year ended 2014, and address the 2 questions below.

Ratio Name

Langley Company

XYZ Inc.

(a) Rate of return on total assets

21.5%

17.9%

(b) Debt ratio

25.0%

10.1%

(c) Accounts receivable turnover

8.3

7.5

(d) Price-Earnings ratio

25

19

(e) Inventory turnover

6.1

5.2

(f) Current ratio

1.96

3.12

(1) Explain the meaning of each of the Langley Company ratios above.
(2) State which company performed better for each ratio.

Reference no: EM131820114

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