How to evaluate the companies as a potential investment


Below are ratios for two companies which operate in the same industry. Company A Company B P/E 27.8 63.0 Gross profit margin 59.1 66.2 Profit Margin 8.6 13.1 Quick 0.8 0.5 Current 1.2 0.65 Debt-to-equity .45 0.78 Return on equity 29.0 26.9 Return on assets 16.8 28.2 Dividend yield 1.7 1.2 Dividend payout 44.0 67.0

Required: Evaluate the companies as a potential investment based on the given ratios.

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Accounting Basics: How to evaluate the companies as a potential investment
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