758 Part Nine Financial Planning and Working Capital Management
bre44380_ch28_732-758.indd 758 10/06/15 09:49 AM
Use data from Yahoo! Finance (finance.yahoo.com) to answer the following questions.- Select two companies that are in a similar line of business and find their simplified balance
sheets and income statements. Then draw up common-size statements for each company and
compute the principal financial ratios. Compare and contrast the companies based on these
data. - Look up the latest financial statements for a company of your choice and calculate the follow-
ing ratios for the latest year:
a. Return on capital.
b. Return on equity.
c. Operating profit margin.
d. Days in inventory.
e. Debt ratio.
f. Times-interest-earned.
g. Current ratio.
h. Quick ratio. - Select five companies and, using their financial statements, compare the days in inventory
and average collection period for receivables. Can you explain the differences between the
companies?
● ● ● ● ●FINANCE ON
THE WEBcompanies in the same industry. Would you calculate the ratio in terms of total liabilities
or total capitalization? What would you include in debt—the bank loan, the deferred tax
account, the R&R reserve, the unfunded pension liability? Explain the pros and cons of these
choices.