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    Ratio analysis: Evaluate the strengths and weaknesses

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    A) compare and evaluate the strengths and weaknesses of ABC and XYZ companies.
    B) calculate the price-to-earnings ratios for both firms. Explain what a P/E ratio tell an analyst. What could be the cause of the difference between ABC'S and XYZ'S P/E ratios?

    © BrainMass Inc. brainmass.com October 10, 2019, 8:19 am ad1c9bdddf
    https://brainmass.com/business/the-time-value-of-money/619273

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    A) compare and evaluate the strengths and weaknesses of ABC and XYZ companies.

    ABC is more profitable but XYZ has more cash flow and more liquidity. See individual comments above ratio-by-ratio in Excel ...

    Solution Summary

    ABC is more profitable but XYZ has more cash flow and more liquidity. See individual comments above ratio-by-ratio in Excel (attached). Discussion of P/E ratio follows along with computation in Excel.

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