If you were comparing two companies of different size (say one is at least 3 times larger than the other) with different products, what financial information (type of information) and financial ratios (at least 3) would you use to evaluate the two companies to determine your preferred investment? Of the ratios and financial information that we have studied so far, which do you feel are the least important (the least important 3 ratios)? Why do you believe each is the most important and least important?
Use these 3 Financial Ratios to evaluate the two companies to determine your preferred investment.
1. Profit Margin
2. Inventory Turnover
3. Debt to total assets
Use these 3 as least important.
1. Average Collection Period
2. Quick Ratio
3. Receivable Turnover
