Pick at least one topic from the following list to discuss, or provide insightful comments on your fellow students’ posts to participate in the discussion. What are the common debt management ratios? What are the tradeoffs for a company to use leverage? Do you think older and mature companies are more likely or less likely to use debt than younger companies? Explain.
2. Go to http://finance.yahoo.com (Links to an external site.)Links to an external site., to find financial information about The Kroger Co. (KR), and Caterpillar Inc. (CAT). Construct the turnover ratios, profit margins and DuPont equations for the two companies. Are these ratios similar or different between the two firms? Do they make sense considering their industry types? Explain.
3. Use some examples to discuss how seasonal factors and different growth rates might distort a comparative ratio analysis. How could you alleviate these problems?