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Ratio Analysis for Almeera and Widam Companies - Essay Example

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The essay "Ratio Analysis for Almeera and Widam Companies" focuses on the critical, and thorough analysis of the major issue son the ratio for Almeera and Widam companies. It is clear that Widam is relatively more leveraged, uses more debts than Almeera…
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Ratio Analysis for Almeera and Widam Companies
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Extract of sample "Ratio Analysis for Almeera and Widam Companies"

It is more able to meet its short-term obligations; however, both the companies are liquid because their liquidity ratios are greater than one.

From the table, it is clear that Widam is more efficient in its operations than Almeera since its efficiency ratios are greater than those of Almeera. Widam uses few assets to generate more sales revenue.

Almeera is more profitable than Widam because the value of its ratios is higher than those of Widam. However, Widam generates more returns for its shareholders than Almeera. Almeera is more efficient than Widam in using its assets to generate revenue. In general, Almeera is more profitable.

Widam has higher EPS which is an indication that it is making more money for its shareholders than Almeera. In addition, its high P/E ratio indicates that its investors are willing to pay more per dollar of earnings. Therefore, Widam is a better investment than Almeera.

In conclusion, though the companies have fluctuating performance, it is clear that Widam is a better investment than Almeera because of the following reasons. First, it is relatively liquid and can meet its short-term obligations with lots of ease. Secondly, it is Widam is more efficient in its operations than Almeera and uses few assets to generate more sales revenue. Thirdly, even though Almeera is more profitable, Widam is also relatively profitable and generates sufficient returns for its shareholders. In addition, even though it uses relatively more debts, it has infinite cover for its interest expense. Finally, it makes more money for its shareholders.

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