I’m studying for my Accounting class and need an explanation.

Q1

REAL-WORLD FOCUS

E

Purpose: Identify summary liquidity, solvency, and profitability information about companies, and compare this information across companies in the same industry.

Address: http://biz.yahoo.com/i

Steps

  • 1.Type in a company name, or use the index to find a company name. Choose Profile. Choose Key Statistics. Perform instruction (a) below.
  • 2.Go back to Profile. Click on the company’s particular industry behind the heading “Industry.” Perform instructions (b), (c), and (d).

Instructions

Answer the following questions.

(a) What is the company’s name? What was the company’s current ratio and debt to equity ratio (a variation of the debt to assets ratio)?

(b) What is the company’s industry?

(c) What is the name of a competitor? What is the competitor’s current ratio and its debt to equity ratio?

(d) Based on these measures, which company is more liquid? Which company is more solvent?

The other 2 questions are attached in work doc, please refer to attached word docs. Thank you