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Compute each company's economic-value-added (EVA) measure

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Assume that you are considering purchasing stock as an investment. You have narrowed the choice to Topline.com and E-shop Express and have assembled the following data.;Requirements;1. Compute the following ratios for both companies for the current year and decide which company's stock better fits your investment strategy.;a. Quick (acid-test) ratio.;b. Inventory turnover.;c. Day's sales in average receivables.;d. Debt ratio.;e. Times-interest earned ratio.;f. Return on common stockholder's equity.;g. Earnings per share of common stock.;h. Price/earnings ratio.;2. Compute each company's economic-value-added (EVA) measure and determine whether the companies' EVA's confirm or alter your investment decision. Each company's cost of capital is 10%.

 

Paper#19363 | Written in 18-Jul-2015

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