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Westfield Capital Management Co.'s equity investment strategy is to invest in companies with low price-to-book ratios, while considering differences in solvency and asset utilization. Westfield is considering investing in the shares of either Jerry's Departmental Stores (JDS) or Miller Stores (MLS). Selected financial data for both companies follow: SELECTED FINANCIAL DATA AS OF MARCH 31, 2006 JDS $21,250 5,700 ($ millions) Sales ... Fixed assets... Short-term debt..... Long-term debt. Equity... Outstanding shares (in millions). Stock price ($ per share).... .... 2,700 6,000 250 51.50 MLS $18,500 5,500 1,000 2,500 7,500 400 49.50

Westfield Capital Management Co.'s equity investment strategy is to invest in companies with low price-to-book ratios, while considering differences in solvency and asset utilization. Westfield is considering investing in the shares of either Jerry's Departmental Stores (JDS) or Miller Stores (MLS). Selected financial data for both companies follow: SELECTED FINANCIAL DATA AS OF MARCH 31, 2006 JDS $21,250 5,700 ($ millions) Sales ... Fixed assets... Short-term debt..... Long-term debt. Equity... Outstanding shares (in millions). Stock price ($ per share).... .... 2,700 6,000 250 51.50 MLS $18,500 5,500 1,000 2,500 7,500 400 49.50

Corporate Financial Accounting
Corporate Financial Accounting
14th Edition
ISBN:9781305653535
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter1: Introduction To Accounting And Business
Section: Chapter Questions
Problem 1.3ADM: Lowes: Ratio of liabilities to stockholders equity Lowes Companies, Inc., a major competitor to The...
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Use following attachment of Westfield to answer this 

a) Compute each of the following ratios for both JDS and MLS:  

1. Price-to-bookratio
2 Total-debt-to-equityratio
3 Fixed-asset-utilization(turnover)

b) Select the company that better meets Westfield's criteria.

ROBLEM 3-5B Leases, Pensions, nd Receivables ecuritization Westfield Capital Management Co.'s equity investment strategy is to invest in companies with low price-to-book ratios, while considering differences in solvency and asset utilization. Westfield is considering investing in the shares of either Jerry's Departmental Stores (JDS) or Miller Stores (MLS). Selected financial data for both companies follow: SELECTED FINANCIAL DATA AS OF MARCH 31, 2006 JDS $21,250 5,700 ($ millions) Sales. Fixed assets. Short-term debt. Long-term debt Equity Outstanding shares (in millions)..... Stock price ($ per share). 2,700 6,000 250 51.50 MLS $18,500 5,500 1,000 2,500 7,500 400 49.50
Transcribed Image Text:ROBLEM 3-5B Leases, Pensions, nd Receivables ecuritization Westfield Capital Management Co.'s equity investment strategy is to invest in companies with low price-to-book ratios, while considering differences in solvency and asset utilization. Westfield is considering investing in the shares of either Jerry's Departmental Stores (JDS) or Miller Stores (MLS). Selected financial data for both companies follow: SELECTED FINANCIAL DATA AS OF MARCH 31, 2006 JDS $21,250 5,700 ($ millions) Sales. Fixed assets. Short-term debt. Long-term debt Equity Outstanding shares (in millions)..... Stock price ($ per share). 2,700 6,000 250 51.50 MLS $18,500 5,500 1,000 2,500 7,500 400 49.50
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