Introduction
To find out the better solution to buy the bookshop, determine Folios Pty Ltd or the coffee shop, cupful Hand Pty Ltd, we make a lay out windate selection by the whole process: group the right information, analyzing the ratios extensively, evaluating the alternatives and finally we determine to invest in count on Folios Pty Ltd. Now we would like to reveal the particular process in two steps.
Firstly, we break up the present and likely future positions on a lower floor the macro and task environmental analysis. They can be deduced by the internal situations analysis, namely ratio analysis. What we can need is descend in the major assignment part A. At the same time, we have known the relevant expenses, dividend information for the two businesses. Secondly, we analyze the investing objective and the likelihood of achieving it, evaluate the two choices and take ultimately after the study of all kinds of ratios real meanings, categorisation of the data and interpretation in the industry views. Whatever we consider the advantages of profitability, liquidity or financial stability, Fancy Folios Pty Ltd exceed Cup Hand Pty Ltd. What we can advice for Jayne Jones is investing in Fancy Folios Pty Ltd! The deductions is showed as below:
Profitability Interpretation
Profitability Summary
        2001         2002
        Fancy
Folios Pty
Ltd         Cup
Hands Pty Ltd         Fancy
Folios Pty
td         Cup
Hands Pty
Ltd
Rate of soften on total asset         50.6 %         45.5 %         53.8 %         41.0 %
Rate of return on
Shareholders equity         49.1 %         42.
6 % Â Â Â Â Â Â Â Â 47.7 % Â Â Â Â Â Â Â Â 39.0 %
Profit margin         9.1 %         8.9 %         8.8 %         8.9 %
Gross profit margin         33.3 %         61.5 %         31.7 %         61.5 %
Earnings per share         1.06 C         0.74 C         1.21 C         0.75 C
Price-earnings ratio         94.1 %         136 %         82.5 %         133 %
Earnings yield         106.3 %         73.8 %         121.3...
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