In: Finance
Select the 10 financial ratios for a 3-year period then compare six (6) common ratios between two other groups.
1) Based on these ratios, which is the stronger company and why?
Company A | Company B | Company C | |||||||
Ratio | 2016 | 2017 | 2018 | 2016 | 2017 | 2018 | 2016 | 2017 | 2018 |
Profitability ratios | |||||||||
Net Profit Margin (%) | 10.73 | 7.93 | 9.71 | 2.32 | 2.78 | 2.06 | 8.53 | 10.19 | 10.17 |
EBIT Margin (%) | 16.09 | 11.63 | 14.38 | 5.90 | 5.96 | 5.05 | 12.11 | 13.70 | 13.94 |
ROE (%) | 28.43 | 20.95 | 26.30 | 13.30 | 17.05 | 12.85 | 28.67 | 28.96 | 24.69 |
ROA (%) | 16.68 | 11.61 | 16.21 | 6.51 | 8.22 | 6.59 | 20.22 | 20.01 | 18.14 |
Debt & Safety ratios | |||||||||
Current Ratio | 1.66 | 1.62 | 1.59 | 1.56 | 1.55 | 1.64 | 1.54 | 1.53 | 1.74 |
Valuation multiples | |||||||||
PER (Price to earnings) | 15.08 | 6.79 | 12.19 | 17.39 | 9.00 | 11.31 | 13.44 | 15.02 | 12.45 |