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18-10B The following ratios are available for Rogers Communications Inc. and Shaw Communications Inc. Evaluate ratios. for a

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Answer #1
a. For deciding which company is more liquid we have to analyze the Liquidity ratios.
The more the liquidity ratio is the better is the liquidity for the company.
From the above ratios given Shaw has better liquidty then Rogers as the Current ratio,
Acid-test ratio and Receivable Turnover ratio are higher for Shaw
b. For determining the solvency we have to analyze the Solvency ratios.
Under the 2 solvency ratios given of Debt to Total Asset and Interest coverage ratio
the lesser the ratio it is better for the company because it will mean that the company with
a less ratio means that it is using less debt and the interest expenses is also low
In this case Shaw is better as its Debt to total assets is lower
c. In all the Profitability ratio Shaw company is better in all the indicators as the Profit margin ratios
and ROA better than that of Rogers. However as far as ROE is concerned Rogers is giving a better return than shaw
As per the given data Rogers is commanding a higher P/E ratio then Shaw, it means that investors are preferring
Rogers over Shaw as investors are willing to give 17.4 times of its earnings as compared to Shaw's 13.7 times
The investors behaviour is not consistent with the analysis of part ©
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