Question

0 P Industry Newspapers Market Data Beta 0.85 0.90 Price/Earings 20.541 13.29 Price to Book 2.07 3.09 Dividend Payout 37.53 30.81 Liquidity Current Ratio 0.88 0.55 Quick Ratio 0.68 0.39 Asset Management Inventory Turnover 33.35| 43.48 Receivables Tumover 10.98 8.50 Fixed Assets Turnover 3.43 2.59 Debt Management Total Debt Total Assets 15.45 26.72 LT Debt/Shareholders' 23.04 33.52 Interest Coverage After 7.63 6.56 DuPont Analysis Net Profit Margin 12.60 8.89 Asset Turnover 0.48 0.85 Return on Equity 9.86 20.89

Company O/P is a diversified media company that generates most of its revenues through newspapers sold around the country and around the world. Because the company is centered largely on one product, it has strong central controls. Competition for subscribers and advertising revenues in this firm’s segment is fierce. The company has also recently built a large office building for its headquarters.

Company O/P owns a number of newspapers in relatively small communities throughout the Midwest and the Southwest. Some analysts view this firm as holding a portfolio of small local monopolies in newspaper publishing. This company has a significant amount of goodwill on its balance sheet, stemming from acquisitions. Key to this firm’s operating success is a strategy of decentralized decision making and administration.

Provide 2-3 ratios to justify which company goes to which description:

Answer 1

ANSWER

ASSET MANAGEMENT RATO includes Inventory turnover, Receivable Turnover and Fixed Asset Turnover.It is a ratio which compares assets of the company to its sales.

Company O have good  Inventory turnover ratio than Company P. which means Company O have taken less time to convert Inventory into Sales.

Company P have good Receivable Turnover ratio than Company O. Which means Company P will take less time to convert there Receivable into Cash.

Company O have good Fixed asset Turnover ratio than Company P. It means Company O generate wells Sales from it Plant,Property and Equipment than Company P.

LIQUIDITY RATIO includes Current Ratio and Quick Ratio it defines the net liquid fund available for the company.

Company O have a poor Liquidity Ratio.When company will be in needs of liquid fund it will difficult for a company to accumalte but it have better liquidity than Company P.

Company P also have a poor Liquidity Ratio.When company will be in needs of liquid fund it will difficult for a company to accumalte.