HCS 219 Week 2 Ratio Analysis

Resource: Ratio Analysis Data Sets 1-6

Your manager at the consulting firm suggests that you send Lauren some examples of calculated ratios with explanations of the data. He has provided data for two fictional companies that you can use.

Compute the ratios for Company A and Company B for the following:

• Current Ratio
• Quick Ratio
• Days Cash Available
• Debt-To-Net-Worth
• Debt Service Coverage Ratio
• Operating Margin
• Return on Equity

Provide a comparison of the ratio results for each company by describing which one has the more favorable result and what this means with respect to overall financial and operational performance.  For example, what is the implication of having a better Quick Ratio?

Include, based on the overall results, which organization you think is stronger financially and why?

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