Financial Detective

Our team has 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 analyzing the financial ratios for the eight pairs of unidentified companies, our team has come to the following conclusions.

Company A Company B

Beta .65 .85

Current Ratio 1.96 1.50

Inventory Turnover 3.08 .93

Total Debt/Total Assets 5.34 14.99

Net Profit Margin 17.97 21.58

From the above chart our team concluded that Company A is in a healthier state than company B. Based on the highlighted information provided above Company A has outperformed Company B in the health sector. Company A has the substantial ratios of a company that can turn their assets into liquidity at any given time, they are able to pay their debt, and generate a decent amount of profit.

Company C Company D

Beta .60 .55

Current Ratio .92 3.35

Inventory Turnover .93 12.60

Total Debt/Total Assets 51.19 14.99

Net Profit Margin 15.00 5.76

From these ratios above we can conclude that Company D is healthier than Company C in the Beer Industry. Apart from the net profit margin, 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 11.67 higher than Company C.

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 3.33

From the chart above, both companies have a high beta which makes them more volatile in the market. Overall, Company F can turn their assets into liquidity faster than Company E and their inventory use is being managed well, making the business more efficient in the Computer Industry.

Company G Company H

Beta 1.70 0.51

Current Ratio 1.57 1.49

Inventory Turnover 13.56 2.42...