## (Solved) Problem 12-82A COMPARING FINANCIAL RATIOS Presented below are selected ratios for four firms: Firm...

Problem  12-82A  COMPARING  FINANCIAL RATIOS Presented below are selected ratios for four firms: Firm A is a heavy equipment manufac- turer, Firm B is a newspaper publisher, Firm C is a food manufacturer, and Firm D is a grocery chain.     Firm A Firm B Firm C Firm D Short-term liquidity         Current ratio 1.3 1.7 1.0 1.6 Debt-management ratio Long-term  debt-to-equity                   1.81                      .45                      .30                      .09 Asset efficiency ratios     Accounts receivable turnover 4.66 8.28 11.92 116.15 Inventory turnover 6.26 40.26 7.29 8.43 Operating income 12.6% 25.4% 21.2% 3.8% Net income 5.9 10.9 10.8 1.9 Return on assets 4.7 10.6 16.8 10.3 Return on equity 36.0 22.6 38.0 21.2     Profitability ratios                           Required: 1.     Which firm has the weakest current ratio? 2.     Explain why the turnover ratios vary so much among the four firms. 3.     Explain why the return on equity ratio is larger than the return on asset ratio for all four firms. 4.     Discuss whether the large differences in the return on equity ratios can exist over long periods of time.

Solution details:
STATUS
QUALITY
Approved

This question was answered on: Oct 15, 2019

Solution~000.zip (25.37 KB)

STATUS

QUALITY

Approved

Oct 15, 2019

EXPERT

Tutor

#### YES, THIS IS LEGAL

We have top-notch tutors who can do your essay/homework for you at a reasonable cost and then you can simply use that essay as a template to build your own arguments.

You can also use these solutions:

• As a reference for in-depth understanding of the subject.
• As a source of ideas / reasoning for your own research (if properly referenced)
• For editing and paraphrasing (check your institution's definition of plagiarism and recommended paraphrase).
This we believe is a better way of understanding a problem and makes use of the efficiency of time of the student.

### Order New Solution. Quick Turnaround

Click on the button below in order to Order for a New, Original and High-Quality Essay Solutions. New orders are original solutions and precise to your writing instruction requirements. Place a New Order using the button below.

WE GUARANTEE, THAT YOUR PAPER WILL BE WRITTEN FROM SCRATCH AND WITHIN A DEADLINE.