Take the role of an investment analyst
(Not rated)
(Not rated)
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)
| Ratios | Graph Tech Inc. | Core Sortware Company |
| Days sales in receiveables | 51 | 43 |
| Inventory Turnover | 9 | 7 |
| Gross Profit Percentage | 62% | 71% |
| Net Income as a percent of sales | 16% | 14% |
| Times-interest-earned | 12 | 18 |
| Return on equity | 29% | 36% |
| Return on assets | 19% | 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
NOT RATED
Purchase the answer to view it
