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    Compare company X and Y on various financial aspects

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    You are an analyst following two companies, Company X and Company Y. You have collected the following information:

    -The two companies have the same total assets.
    -Company X has a higher total assets turnover than Company Y.
    -Company X has a higher profit margin than Company Y.
    -Company Y has a higher inventory turnover ratio than Company X.
    -Company Y has a higher current ratio than Company X.

    Which of the following statements is most correct?

    a. Company X must have a higher net income.
    b. Company X must have a higher ROE.
    c. Company Y must have a higher quick ratio.
    d. Statements a and b are correct.
    e. Statements a and c are correct.

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    e. Company X must have a higher net income.

    This is because of higher ...

    Solution Summary

    The solution compares company X and Y on various financial aspects.

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