Identify which company you would feel to better credit risk

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Reference no: EM131195863

Ratio

Your Problem-Solution assignment for this module is to conduct a ratio analysis of two different companies.

First click the following linked Financial Fact Sheet to view the financial information for Scarlett Company and Gable Company. The fact sheet contains the accounting details you need to complete this problem-solution assignment.

Click on the line Financial Fact sheet - Scarlett Company / Gable Company

1. Please complete the ratios for the following two companies: 1-current ratio, 2-acid test ratio, 3-accounts which includes notes receivable turnover, 4-inventory turnover, 5-days sales in inventory, 6-days sales uncollected. Please then identify which company you would feel to the better short term credit risk and state your reasons why.

2. Please complete the ratios for the following two companies: 1-profit margin ratio, 2-total asset turnover, 3-return on total assets. Each company then paid a dividend of $3 and as well the stock of each company can be bought at $25 per share, so with this information then compute 4-price earnings ratio and then dividend yields for both. Please then address which company you feel to be the best investment and state your reasons why.

Reference no: EM131195863

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