problem you have the opportunity to invest 10000


Problem

You have the opportunity to invest $10,000 in one of two companies that are part of the same industry. The only information you have about the companies is presented below. Assume that high means in the top third of the industry, average means in the middle third and low is in the bottom third. Based on this information, which company would you select? Explain you selection.

                Ratio                                                   Company A                         Company B

ROA                                                                   Average                               High

Profit Margin                                                        Low                                        High

Financial Leverage                                                Low                                        High

Current ratio                                                        High                                       Low

Price/Earnings                                                      Average                               High

Debt-to-Equity                                                     Low                                        High

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Financial Accounting: problem you have the opportunity to invest 10000
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