Compute a recent five-year average of the ratios

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Reference no: EM133114690

Question - Compute a recent 5-year average of the following ratios for three companies of your choice (attempt to select diverse firms):

Retention rate







Company

2021

2020

2019

2018

2017

Average

McDonald's

0.48

0.21

0.41

0.45

0.41

0.392

Starbucks

0.5

-1.07

0.51

0.61

0.5

0.21

Texas Roadhouse

0.71

0.2

0.41

0.57

0.56

0.49








Net Profit margin







Company

2021

2020

2019

2018

2017

Average

McDonald's

32.33%

24.63%

28.20%

27.86%

22.76%

27.16%

Starbucks

14.45%

2.87%

13.81%

11.98%

19.29%

12.48%

Texas Roadhouse

6.61%

1.29%

6.35%

6.43%

5.95%

5.33%








Equity turnover







Company

2021

2020

2019

2018

2017

Average

McDonald's

-5.482

-2.455

-2.602

-3.360

-6.983

-4.176

Starbucks

-5.461

-3.013

-4.253

21.128

4.107

2.502

Texas Roadhouse

0.080

0.259

0.301

0.260

0.261

0.232








Total asset turnover







Company

2021

2020

2019

2018

2017

Average

McDonald's

0.34

0.38

0.46

0.64

0.70

0.50

Starbucks

1.00

1.00

1.20

1.30

1.60

1.22

Texas Roadhouse

1.03

1.10

1.39

1.67

1.67

1.37








Total assets/equity







Company

2021

2020

2019

2018

2017

Average

McDonald's

-11.65

-6.73

-5.79

-5.24

-10.34

-7.95

Starbucks

-5.90

-3.76

-3.08

20.65

2.64

2.11

Texas Roadhouse

0.0024

0.0023

0.0017

0.0014

0.0014

0.0018

Based on these ratios, explain which firm should have the highest growth rate of earnings.

Reference no: EM133114690

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