50.1K
Verified Solution
Link Copied!
On the basis of the ratio analysis, which company appears to be in stronger financial condition and why?

\begin{tabular}{|c|l|r|r|} \hline 1 & & 1 & 2 \\ \hline 2 & Profit margin & 3.67% & 3.32% \\ \hline 3 & Return on assets & 9.57% & 7.87% \\ \hline 4 & Return on equity & 17.19% & 22.22% \\ \hline 5 & Receivable turnover & 16.53 & 14.77 \\ \hline 6 & Average collection period & 21.78 & 24.37 \\ \hline 7 & Inventory turnover & 15.25 & 8.76 \\ \hline 8 & Fixed asset turnover & 3.76 & 4.28 \\ \hline 9 & Total asset turnover & 2.60 & 2.37 \\ \hline 10 & Current ratio & 1.07 & 2.56 \\ 11 & Quick ratio & 0.72 & 1.62 \\ \hline 12 & Debt to total assets & 44.33% & 64.60% \\ \hline 13 & Times interest earned & 10.21 & 4.95 \\ \hline 14 & Fixed charge coverage & 5.76 & 3.41 \\ \hline 15 & & \\ \hline \end{tabular}
Answer & Explanation
Solved by verified expert