Question - Please review the following 6 ratios for Johnson Company and Lee Enterprises for the year ended 2014, and address the 2 questions below. Ratio Name
Johnson Company - Lee Enterprises
(a) Accounts receivable turnover 6.5 5.3
(b) Days' inventory outstanding 40 35
(c) Debt ratio 29.3% 25.7%
(d) Return on common stockholders' equity 14.7% 10.5%
(e) Current ratio 2.50 3.60
(f) Price/Earnings ratio 10 12
Instructions: This is a 2-part question.
(1) Explain the meaning of each of the Johnson Company ratios above.
(2) State which company performed better for each ratio.