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The Financial Detective 2005

In: Business and Management

Submitted By shamsshah
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THE FINANCIAL DETECTIVE, 2005

I focused on the companies’ beta, current ratio, inventory turnover ratio, total debt/total assets ratio and net profit margin to identify if the company is in a healthy state within its industry. After thoroughly examining and analysing the financial ratios for the eight pairs of unidentified companies, following are the conclusions regarding companies according to my analysis. | Company A | Company B | Beta | 0.65 | 0.85 | Current Ratio | 1.96 | 1.50 | Inventory Turnover | 3.08 | 0.93 | Total Debt/Total Assets | 5.34 | 14.99 | Net Profit Margin | 17.97 | 21.58 |

From the above chart I concluded that company A is in a healthier state than company B. Based on the highlighted information provided above company A has outperformed than company B in the health sector. Company A has the substantial ratios of a company that can turn their assets into liquidity at any time, they are able to pay their debt, and generate a decent amount of profit. Company A is less risker than company B. Company have less debts than Company B. | Company C | Company D | Beta | 0.55 | 0.60 | Current Ratio | 0.92 | 3.35 | Inventory Turnover | 12.60 | 7.44 | Total Debt/Total Assets | 51.19 | 0.00 | Net Profit Margin | 15.00 | 5.76 |

From the above chart I concluded that company D is in a healthier state than company C in the Beer industry. Company D is able to turn their assets into liquidity at a faster rate of 2.43x than company C. The productivity in which they are able to utilize their resources to generate sales and profits is higher than company C. Company D is little bit more risker than Company C. Company D have not any debt. | Company E | Company F | Beta | 1.20 | 1.05 | Current Ratio | 1.20 | 2.63 | Inventory Turnover | 67.96 | 74.78 | Total Debt/Total Assets | 2.18 | 0.00 | Net Profit Margin | 6.18 |…...

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