Please review the following real-world ratios for Johnson & Johnson and Pfizer for the year ended 2012 and address the 2 questions below.
|
Ratio Name
|
Johnson & Johnson
|
Pfizer
|
|
|
|
|
Profit margin
|
16.1%
|
24.7%
|
|
Inventory turnover ratio
|
3.1
|
1.7
|
|
Average collection period
|
59.4 days
|
69.1 days
|
|
Cash debt coverage ratio
|
.27
|
.16
|
|
Debt to Total assets
|
46.6%
|
127.5%
|
Required:
1) Please explain the meaning of each of the Pfizer ratios above.
2) Please state which company performed better for each ratio.