You have been asked by the investment committee to analyze a company’s utilization of its economic resources. You must compare its

performance with one of its competitors and industry standards. Prepare

a memorandum to the investment committee regarding the results of your analysis.

Unless otherwise state, you must use annual financial information.

 

ADDITIONAL INQUIRIES

Inventory – Which company provided the most useful information from an

Investor’s point of view? Why did you find the information useful? If

Quarterly information is available how was the information useful?

Ratios – In addition to the two ratios listed, also compare the accounts receivable turnover.

- How do the ratios compare with the industry ratios?

Property, plant, and equipment – What are the components of property, plant and equipment? What methods of depreciation were used? What, if disclosed, were the useful lives of the assets? What was depreciation expense for the year?