Selected financial data for a recent year for two clothing competitors, Le Château Inc. and H&M AB, are presented here (in millions, except share price):
Instructions
(a) For each company, calculate the following values and ratios. Where available, industry averages are included in parentheses.
1. Working capital (n/a)
2. Current ratio (2.3:1)
3. Debt to total assets (21.9%)
4. Earnings per share (n/a)
5. Price-earnings ratio (16.0 times)
(b) Compare the liquidity, solvency, and profitability of the two companies and their industry.
(c) Does the fact that Le Château reports its results in Canadian dollars while H&M uses Swedish krona affect your com-H&M (in SEK, parisons in (b)? Explain.
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