Analyze and compare the following firms financial ratio results. Which seems to be in a better financial position? Why? Ratio Firm A Firm B Debt-To-Equity 0.65 2.23 Current Ratio 1.74 0.83 Net Profit Margin 8.07% 9.59% Return On Equity 12.81% 47.17%

Analyze and compare the following firms financial ratio results. Which seems to be in a better financial position? Why? Ratio Firm A Firm B Debt-To-Equity 0.65 2.23 Current Ratio 1.74 0.83 Net Profit Margin 8.07% 9.59% Return On Equity 12.81% 47.17%

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter10: Stockholder's Equity

Section: Chapter Questions

Problem 78E: Ratio Analysis Consider the following information. Required: Calculate the stockholder payout...

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Question

Analyze and compare the following firms financial ratio results. Which seems to be in a better financial position? Why?

Ratio	Firm A	Firm B
Debt-To-Equity	0.65	2.23
Current Ratio	1.74	0.83
Net Profit Margin	8.07%	9.59%
Return On Equity	12.81%	47.17%

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