Liquidity, Solvency, and Profitability Assignment
February 19th, 2020
You all get the chance to play the role of a financial analyst. The summary should be a comparison of each company’s performance for each major category of ratios (liquidity, solvency, and profitability) . Focus on major financial differences as you compare each company’s performance as to why a company would be the better carreer choice
Liquidity
Solvency
Profitability
Overall Conclusion
| Dell | Apple | ||||||||||
| Liquidity | . | ||||||||||
| Current Ratio | Current assets | 3.25 | 1.44 | ||||||||
| Current liabilities | |||||||||||
| Inventory Turnover | Cost of Goods Sold | 5.5 | 5.9 | ||||||||
| Average Inventory | times | times | |||||||||
| Number of Days Sales In Inventory | Average Inventory | 67 | 62 | ||||||||
| Average Daily Cost of Goods Sold | days | days | |||||||||
| Accounts Receivable Turnover | Net credit sales | 13.1 | 15.4 | ||||||||
| Average Net Accounts Receivable | |||||||||||
| Number of Days' sales outstanding (DSO) | Average Net Accounts Receivable | 27.9 | 23.6 | ||||||||
| Average Daily Sales | days | days | |||||||||
| Solvency: | |||||||||||
| Ratio of Liabilities to Stockholdrs Equity | Total Liabilities | 30.3% | 35.3% | ||||||||
| Stockeholders Equity | |||||||||||
| Number of Time Preferred Dividends are Earned | Net Income | 3 | 1.5 | ||||||||
| Preferred Dividends | |||||||||||
| Ratio of Fixed Assets to Long Term Liabilities | Fixed Assets | 23.3% | 84.0% | ||||||||
| Long-term Liabilities | |||||||||||
| Times-Interest-Earned Ratio | Net Income + Int Expense + Tax Expense | 542.3 | 11.6 | ||||||||
| Interest Expense | |||||||||||
| Profitability | |||||||||||
| Dividend Yield | Dividend per share of common stock (Yahoo Finance 11/1/2013) | 1.0% | 2.0% | ||||||||
| Market price per share of common stock (Yahoo Finance 11/1/2013) | |||||||||||
| Rate of Return on Common Stockholders' Equity (ROE) | Net income – Preferred dividends | 8.0% | 68.5% | ||||||||
| Average common stockholders' equity | |||||||||||
| Price/Earnings Ratio (Multiple) | 12/31/12 | 29 | 24 | ||||||||
| EPS as of 12/31/2012 | |||||||||||
| Earnings per Share of Common Stock (basic – common) | As given in the income statement | 0.89 | 3.01 | ||||||||
| Ratio of Net Sales to Total Assets | Net Sales | 0.65 | 1.45 | ||||||||
| Average Total Assets | |||||||||||
| Rate Earned on Total Assets (ROA) | Net Income + Interest Expense | 6.1% | 14.4% | ||||||||
| Average Total Assets | |||||||||||
Get Finance homework help today
