Question

analysis A&B company’s ratios

1.A company ratios cover 5 years（From 2013-2017）

2. campare B company 2017 ratio with A company 2017 ratio

Brahim' s group 0 current assets 2 current liabilities 2017 91215.30 103.38700 98,028.00 57,966.20 112.04.80 103,111.80 62,378.00 232.00 165 2013 2014 2015 016 147,717.90 126,933.70 liquidity i 12 3 inventories 7,350.90 52530 7.00.80 7,066.80 ,128.00 6 259.00 4 receivables S annual sales 80,457.70 8702.30 59,267.90 8,70700 63,138.00 394, 828. 60363,925,10 281,295.10 266,364. 00 291, 563.00 asset mgmt average sales per day sale/38 1, 081. 72 969. 68 770.67 729.76 798. 80 outstandingerec/ayer sales 24.39 247.a0140 24.0.7020134.130.00 128.92.00 7 total Iiabllities 36,264.40 17,827.80 478.680.00 38.658.00 372 27700y 047 L693 TOTAL ASSETS 0.46 debt ngat total equity 288, 883. 00 273,360. 9 257,942. 90 245, 522. 00 243, 364. 00 22,02780 1.92.20 15.078 70 74,957 00 6,937.00 -0.02 15,580.00 l Net incom profitablity EBIT 61,540 40 50,490.30 3.598.30 iz conn equity 3 shares outstanding 254,226.30 246,577.80 230,898.10 105,749.00 217,629.80 234,284.80 238,285.50 238,286.00 236.20 .0 1213 nkt value 0.88 1. 32 1. 02 ( fmarket price per share

Answer 1

1. Liquidity ratios measure a company's ability to pay off its short-term debts as they come due using the company's current or quick assets.

The quick ratio is an indicator of a company's short-term liquidity position, and measures a company's ability to meet its short-term obligations with its most liquid assets.

  Current ratio of Company A is better than Company B which shows the better capability of Company A to meet its short term debt liabilities.

2. Asset Management Ratios attempt to measure the firm's success in managing its assets to generate sales.

Company A has a very high ratio in comparison to Company B.

A higher ratio is considered better but whether a particular ratio is good or bad depends on the industry in which your company operates.

3. The debt management ratio measures how much of a company's operations comes from debt instead of other forms of financing. The debt management ratio is one measure among many of a company's risk and likelihood of default.

  Generally, a ratio of 0.4 – 40 percent – or lower is considered a good debt ratio. Therefore, Company A is in better position.

The maximum acceptable debt-to-equity ratio is 1.5-2 and less.

4. It is one of the best measures of the overall results of a firm, especially when combined with an evaluation of how well it is using its working capital. The measure is commonly reported on a trend line, to judge performance over time. It is also used to compare the results of a business with its competitors.

Company A is suffering loss whereas Company B is enjoying profit. Company B has a better position and ratio.

The operating profit margin ratio indicates how much profit a company makes after paying for variable costs of production such as wages, raw materials, etc. It shows the efficiency of a company controlling the costs and expenses associated with business operations.

Company A has a higher profit margin ratio.

5. Market value ratios. Market value ratios are used to evaluate the current share price of a publicly-held company's stock. These ratios are employed by current and potential investors to determine whether a company's shares are over-priced or under-priced.

Generally this ratio is considered to be best at 1. Here company B reflact a better ratio.