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    INTERPRETING FINANCIAL STATEMENTS/liquidity ratios/profitabi

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    BYP4-10 Manitowoc Company and Caterpillar Corporation are both producers and sellers of
    large fixed assets. Caterpillar is substantially larger than Manitowoc. Financial information taken
    from each company's financial statements is provided below.
    Instructions
    (a) Calculate the following liquidity ratios for the current year, and discuss the relative liquidity
    of the two companies.
    (1) Current ratio.
    (2) Quick (acid-test) ratio.
    (3) Current cash debt coverage.
    (4) Accounts receivable turnover.
    (5) Inventory turnover.
    (b) Calculate the following profitability ratios for the current year, and discuss the relative
    profitability of the two companies.
    (1) Asset turnover.
    (2) Profit margin on sales.
    (3) Return on assets.
    (4) Return on common stockholders' equity.
    (c) Calculate the following solvency ratios for the current year, and discuss the relative solvency
    of the two companies.
    (1) Debt to assets.
    (2) Times interest earned.

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    https://brainmass.com/business/financial-statements/interpreting-financial-statements-liquidity-ratios-profitabi-48339

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    BYP4-10 Manitowoc Company and Caterpillar Corporation are both producers and sellers of
    large fixed assets. Caterpillar is substantially larger than Manitowoc. Financial information taken
    from each company's financial statements is provided ...

    Solution Summary

    This explains the steps to interpret financial statement and liquidity ratios/profitability ratios

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