The following are comparative financial statements of Hi Inc. and Low Corp. for the last four years:
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For discussion: |
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1. |
a. |
Calculate the following ratios for each corporation for 2016, 2017, and 2018. |
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Current Sales to total assets Return on total assets Return on shareholders’ equity Gross profit Net profit Debt to shareholders’ equity Earnings per share Price-earnings |
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b. |
Evaluate each company’s trends for sales, gross profit, and net income as disclosed on the income statements. |
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2. |
What is your evaluation of |
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a. |
The liquidity of each corporation? |
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b. |
Profitability? |
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c. |
The financial structure of each corporation? |
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d. |
The stock market’s perceptions of these companies? |
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3. |
Which corporation do you think would be a better investment if you were planning to purchase common shares? |
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