Problem

Analyzing an Investment by Comparing Selected RatiosYou have the opportunity to invest $10...

Analyzing an Investment by Comparing Selected Ratios

You have the opportunity to invest $10,000 in one of two companies from a single industry. The only information you have follows. The word high refers to the top third of the industry; average is the middle third’; low is the bottom third. Which company would you select? Write a brief paper justifying your recommendation.

Ratio

Company A

Company B

Current

High

Average

Quick

Low

Average

Debt-to-equity ratio

High

Average

Inventory turnover ratio

Low

Average

Price/earnings

Low

Average

Dividend yield ratio

High

Average

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