Investment recommendation
Take the role of an investment analyst at Prudential Bache. It is your job to recommend investments for your clients. The only information you have are some ratio values for two companies in the pharmaceuticals industry.
|
Ratio
|
Healthtime
|
Mocek
|
|
Return on equity.........................................................
|
21.5%
|
32.3%
|
|
Return on assets..........................................................
|
16.4%
|
17.1%
|
|
Days' sales in receivables.............................................
|
42
|
36
|
|
Inventory turnover......................................................
|
8
|
6
|
|
Gross profit percentage................................................
|
51 %
|
53 %
|
|
Net income as a percentage of sales......................................
|
8.3%
|
7.2%
|
|
Times interest earned.............................................................
|
9
|
16
|
Write a report to Prudential Bache's investment committee. Recommend one company's stock over the other. State the reasons for your recommendation.