Company X is competing with company Y. These are their ratios: x y Profit Margin .144 .172 ROA .066 .062 ROE .118 .154 Based on Profitability, which company is doing better when compared to the other?
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Company X is competing with company Y. These are their ratios:
| x | y | |
| Profit Margin | .144 | .172 |
| ROA | .066 | .062 |
| ROE | .118 | .154 |
Based on Profitability, which company is doing better when compared to the other?
Profit margin is the margin calculated by comparing the sale value with the cost associated with it. Return on Assets means the return generated by the company with the available resources (or) assets. Return on Equity means the return generated by the company and given to the equity holders.
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- Calculate the projected price/earnings ratio and market/book ratio. Do these ratios indicate that investors are expected to have a high or low opinion of the company?if a company profit margin is 0.6 and the current ratio is 0.6, is it advisable to invest in the company or not?Should we use (1) total sales, (2) EBITDA, (3) EBIT, or (4) net income to evaluate firm performances? Please explain. In what cases that one is better than other indicators?
- what do the final numbers for each of these ratios mean i.e solvency ratio 0.0322 - is this good? are they in profit, what can they do to improve,The P/E ratio is most useful in .... : Comparing the premium that the market places on the total dollar value of earnings among competitors. Comparing the premium that the market places on the total dollar value of earnings per share among competitors. Comparing the return on earnings among competitors. Forecasting the future earnings of a company.Profitability earning is a real barometer to measure the Select one: O a. Sales of business firm O b. Effectiveness of business firm O c. None of the options O d. Cost of business firm O e. Efficiency of business firm
- True or False If one is to compare two companies that have different growth rates, he must utilize the P/B ratio than any other ratios.Comparison:1. Observe the trend of revenues for both companies. Which company has higher revenue?2. Observe the gross margin for both companies. Which company is more profitable?3. Observe the operating expenses for both companies. Which company has more operating expenses?4. Observe the net income for both companies. Which company is more profitable?5. Which company is more profitable using this type of analysis?Which of the following statements are true about profitability ratios? Check all that apply. If a company has a net profit margin of 10%, it means that the company earned a net income of $0.10 for each dollar of sales. If a company’s operating margin increases but its profit margin decreases, it could mean that the company paid more in interest or taxes. An increase in the return on assets ratio implies an increase in the assets a firm owns. If a company issues new common shares but its net income does not increase, return on common equity will increase.
- What does the price/earnings (P/E) ratio show? If one firm’s P/E ratio is lower thanthat of another firm, what factors might explain the difference?What is the comparison (analysis) of the Profit Margin of Industry Average Ratio and the Company A Ratio? The Profit Margin has decreased and increased. Why? Industry Average Profit Margin 2015: 23.43% 2016: 29.54% 2017: 15.81% 2018: 30.59% 2019: 22.42% Company A Profit Margin 2015: 14.67% 2016: 8.06% 2017: 9.70% 2018: 13.74% 2019: 7.65%Which of the following statements regarding the current ratio is true? a.The current ratio is more useful than working capital in making comparisons across companies. b.The current ratio is not useful in making comparisons with industry averages. c.Working capital is more useful than the current ratio in making comparisons across companies. d.All of these statements are true.