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Goodyear & Goodrich: Compute the following for each company...

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>>> See attached file for full problem description. <<<

A. Compute the following for each company (round computations to one decimal place):
1 Current Ratio
2 Quick Ratio
3 Working capital
4 Return on average total assets
5 Return on average total stockholders' equity

B. From the viewpoint of a short-term creditor, which of these companies appears to have the greater short-term debt paying ability and why?

C. In which company does management appear to be using the resources under its control most efficiently and why?

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Goodyear Goodrich

Total current assets $3,841,600 $950,000
Total current liabilities 2,736,300 600,700
Total quick assets 1,883,300 459,300
Average total assets 9,789,600 2,489,600
Average stockholders' equity 3,281,700 1,000,800
Operating income 1,135,400 242,900
Net ...

Solution provided by:
Manal Elkhoshkhany, MBA
Education
  • BA, Ain Shams University, Cairo Egypt
  • MBA, California State University, Sacramento
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