Ramer Company and Matson Company
Assume the Following Information

question 109

Multiple Choice

Ramer Company and Matson Company
Assume the following information for Ramer Company, Matson Company, and for their common industry for a recent year.
$\begin{array}{llll}&\text { Ramer } & \text { Matson } & \text { Industry Average }\\\text { Current ratio } & 3.50 & 2.80 & 3.00 \\\text { Accounts receivable turnover } & 5.00 & 8.10 & 6.00 \\\text { Inventory tumover } & 6.20 & 8.00 & 6.10 \\\text { Interest coverage ratio } & 9.00 & 12.30 & 10.40 \\\text { Debt-equity ratio } & 0.70 & 0.40 & 0.55 \\\text { Retum on investment } & 0.15 & 0.12 & 0.15 \\\text { Dividend payout ratio } & 0.80 & 0.60 & 0.55 \\\text { Earnings per share } & \$ 3.00 & \$ 2.00 & -\end{array}$ (CMA adapted, Jun 90 #19) Regarding the data for Ramer Company and Matson Company, which one of the following is correct if both companies have the same total assets and the same sales?

• A)Ramer has more cash than Matson.
• B)Ramer has fewer current liabilities than Matson.
• C)Matson has less shareholders' equity than Ramer.
• D)Matson has a shorter operating cycle than Ramer.
• E)None of the above is correct.

---

Definitions:

Glycogen

A multibranched polysaccharide of glucose that serves as a form of energy storage in animals and fungi.

Spoon-shaped Nails

A condition where the nails become concave and resemble the shape of a spoon, often indicative of iron deficiency anemia.

Imbalanced Nutrition

A nutritional state where intake of nutrients is not in proper proportion to meet the body's needs, leading to undernutrition or overnutrition.

Iron

A mineral essential for human life, involved in creating red blood cells, which carry oxygen around the body.