2 discussion questions Essay Example | Topics and Well Written Essays - 750 words

2 discussion questions - Essay compositors caseThe business may also have seasonal nature.Liquidity ratios go with A is more large-hearted to a potential lender its current ratio is about the industry average while Company Bs is way little. Moreover, As quick ratio exceeds average (which, though, may be a sign of not very efficient cash and cash securities management).Efficiency ratios for the industry in general average collection period decreased by 2 days in 2002, and blood turnover increased. Turnover growth rate for some(prenominal) A and B was positive but less than industry average. Additionally, average collection period went up. Collection discipline and overall asset management should be examined closely.Profitability ratios Company B has an advantage vs. A in all three categories, though both companies and the industry overall show positive growth. Using Du-Pont system (see graphs on the next page), one evoke see that both companies have lower than average asset tu rnover but B encompass for it with high operating profit margin and achieves high ROA.By dividing the book look upon of UPS ($16.884bln) by the turn of shares (1.07bln as indicated at Yahoo Finance resource) we get book prise per share of $15.78. Market order per share as of 3rd January 2007 is $74.97. For FDX, book and foodstuff value per share equal to $37.48 ($11.511bln / 307.12M ) and $109.77.UPS market value can be calculated as $74.97 per share x 1.07bln shares = $80.218 bln and its market value added is $80.218bln - $16.884bln = $63.334bln. FDX market value $109.77 per share x 307.12M shares = $33.712 bln and market value added equals to $33.712 bln - $11.511bln = $22.210bln.A difference between book value and market value of a company exists because investing into a company is not equivalent to buying its building or production lines it is investment into the way companys assets are utilized,