Real-World Case Identifying companies based on financial statement information
The following ratios are for four companies in different industries. Some of these ratios have been discussed in the textbook, others have not. but their names explain how the ratio was computed. This data are for the companies’ 2008 fiscal years. The four sets of ratios, presented randomly are:
| Company 1 | Company 2 | Company 3 | Company 4 |
Current assets ÷total assets | 47% | 11% | 15% | 20% |
Operating cycle | 221 | 58 | 11 | 30 |
Return on assets | 5% | 4% | 4% | 18% |
Gross margin | 20% | 40% | 20% | 54% |
Sales ÷ property, plant and equipment | 3.8 | 3.7 | 4.8 | 40.9 |
Sales ÷ number of full-time employees | 453,407 | 341,958 | 49,865 | 29,057 |
The four companies to which these ratios relate, listed in alphabetical order, are:
Caterpillar, inc. is a company that manufactures heavy construction equipment,
Denny’s Corporation operated over 1.541 restaurants as of December 31, 2008.
Molson Coors Brewing, inc. is a company that produces beer and related products.
Weight Watchers International, inc. is a company that provides weight loss services and products.
Required
Determine which company should be matched with each set of ratios. Write a memorandum explaining the rationale for your decisions.
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