Current ratio The current ratio is normally ,used to indicate the ability of the company to pay its short term liabilities such as payables and debts using its short term assets like inventory, cash and receivables. If the current ratio is high, the company is more capable of paying the obligations (Brigham, 2013). If the ratio is below one, it indicates that the company cannot be able to pay its debts if they become due at that point Current ratio = current assets / current liabilities Apix Printing = 852,608 / 734,760 = 1.16 RR Donnelly = 3373.3 / 2367.3 = 1.42 Vista Print = 157,941 / 241,501 = 0.65 Apix printing and RR Donnell have a current ratio of above one and they are therefore able to pay their obligations is they become due. Vista …show more content…
It shows the amount of dollars the company earns that is translated to profits (Brigham, 2013). The higher the net profit margin percentage the more profitable the company is. Net profit margin percentage = net profit / revenue *100 Apix Printing = 24860 / 2121512 = 1.17% RR Donnelly = 19.50/ 3069.3 = 0.64% Vista printing = 43316/ 1270236 = 3.41% Vista Printing is the most profitable among the three. RR Donnelly is the least profitable. Apix Printing is also profitable and investor will find it competitive. Return on equity percentage Return on equity percentage represents the net income that is returned as the shareholders equity percentage. It measures the profitability of the company by showing the profit generated by the firm with the amount invested by its shareholders (Brigham, 2013). Return on Equity percentage = Net Income / Shareholder's Equity Apix Printing = 24860 / 411317 *100 = 6.04% RR Donnelly = 19.50 / 593.80 *100 = 3.28% Vista Print 43316 / 232457 *100 = 18.63% Vista Print is the most profitable company generating more profit with the amount invested by its shareholders. Apix printing is second and investors may find it competitive in the