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determine which company should be matched with each set of ratios write a memorandum 650355

Real World Case Different numbers for different industries

The following ratios are for four companies in different industries. Some of these ratios have been discussed in the textbook; others have not, but their names explain how the ratio was computed. The four sets of ratios, presented randomly, are

Ratio

Company 1

Company 2

Company 3

Company 4

Current assets ÷ total assets

12%

18%

20%

72%

Operating cycle

42 days

35 days

19 days

409 days

Return on assets

12%

19%

5%

5%

Gross margin

35%

55%

46%

24%

Sales ÷ property, plant and equipment

1.89 times

38.97 times

1.97 times

6.08 times

Sales ÷ number of full time employees

$540,883

$29,942

$55,687

$413,252

The four companies to which these ratios relate, listed in alphabetical order, are

1. Anheuser Bush Companies, Inc., is a company that produces beer and related products. Its fiscal year end was December 31, 2007.

2. Wendy’s International, Inc., operates 1,414 of the 6,645 Wendy’s restaurants in the United States and 19 other countries. Its fiscal year end was December 30, 2007.

3. Deere & Company is a company that manufactures heavy construction equipment. Its fiscal year end was December 31, 2007.

4. Weight Watchers International, Inc., is a company that provides weight loss services and products. Its fiscal year end was December 31, 2007.

Required

Determine which company should be matched with each set of ratios. Write a memorandum explaining the rationale for your decisions.

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