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Question 5. 5. (TCO F) Please review the following real-world ratios for Johnson & Johnson and Pfizer for the year ended 2012 and address the 2 questions below.
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Ratio Name
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Johnson & Johnson
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Pfizer
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Profit margin
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16.1%
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24.7%
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Inventory turnover ratio
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3.1
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1.7
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Average collection period
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59.4 days
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69.1 days
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Cash debt coverage ratio
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.27
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.16
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Debt to Total assets
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46.6%
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127.5%
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Required:
1) Please explain the meaning of each of the Pfizer ratios above.
2) Please state which company performed better for each ratio.
(Points : 36)
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