Answered: Apple Inc. Amazon Inc. Current Ratio…

Apple Inc. Amazon Inc. Current Ratio 1.36 1.10 Debt to Equity Ratio 395.70% 262.95% Gross Profit Ratio 38.33% 25.45% Return on Equity Ratio 74.99% 24.95%

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)

22nd Edition

ISBN:9781305666160

Author:James A. Heintz, Robert W. Parry

Publisher:James A. Heintz, Robert W. Parry

Chapter15: Financial Statements And Year-end Accounting For A Merchandising Business

Section: Chapter Questions

Problem 4CE

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Question

Based on these calculations, which company appears to be more risky and which company appears to be more profitable? How can you tell? (Keep in mind that the current ratio and debt to equity ratio are "risk ratios" and the gross profit ratio and return on equity ratio are "profitability ratios").

Apple Inc.
Amazon Inc.
Current Ratio
1.36
1.10
Debt to Equity Ratio
395.70%
262.95%
Gross Profit Ratio
38.33%
25.45%
Return on Equity Ratio
74.99%
24.95%

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