Liquidity Ratio’s
-Types of Liquidity Ratios: Current Ratio, Quick Ratio, Debt to Equity Ratio
If the current ratio, the quick ratio and the debt to equity ratio are all taken into account then the company that has the best liquidity is Decker’s Outdoor Corporation. The current ratio for this company is 4.724 which is the highest and it shows that Decker’s Outdoor Corporation has alarge amount of working capital. Its quick ratio is 2.724 and is the third highest, which also shows that the company has a lot of working capital. The debt to equity ratio measures how well company manages its debt and Decker’s Outdoor Corporation has the second highest ratio with 2.38.
Efficiency Ratios
-Types of Efficiency Ratios: DSO ratio, Inventory Turnover Ratio, Accounts Payable to Sales Ratio
The company that has the highest efficiency is IBMCorporation. For its DSO ratio it takes 1.00 day, on average, for the company to turn its accounts receivables into cash which is the quickest out of all the companies. IBM Corporation also has the best inventory turnover ratio with a ratio of 310.08. Inventory turnover indicates how fast a company can move its merchandise so IBM Corporation is able to do this quickly. The third efficiency ratio is the accounts payable to sales ratio. This ratio indicates how much of a supplier’smoney a company is using to fund its sales. IBM Corporation does not have the greatest accounts payable to sales ratio with a number of 26.08 putting it sixth best.
Profitability Ratios
-Return on Sales, return on assets, return on equity
Out of all the companies the one with the best profitability is Apple Inc. The return on this company’s sales is 15.33% which means it makes 15.33% profit for every dollar it makes on its sales. This is the second highest return on sales ratio out of all the companies. Apple Inc has the third best return on asset ratio with a return of 10.59%. The return on asset ratio displays the percentage of profits earned...