Take the role of an investment analyst

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PART A: Take the role of an investment analyst at YYYY Company. It is your job to recommend investments for your client. The only information you have are the following ratio values for two companies in the graphics software industry. Write a report to the XXXXX XXXXX investment committee. Recommend one company's stock over the other. State the reasons for your recommendation. (see attached image)

RatiosGraph Tech Inc. Core Sortware Company
Days sales in receiveables5143
Inventory Turnover97
Gross Profit Percentage62%71%
Net Income as a percent of sales16%14%
Times-interest-earned1218
Return on equity29%36%
Return on assets19%14%

PART B: b. You are analyzing ABC Company, a computer manufacturer. You notice that accounts receivable turnover this year is significantly lower than prior years. Provide three explanations that would be consistent with this observation. Explain whether these would be of concern to you.

    • 12 years ago
    FIN - Take the role of an investment analyst
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