1. Briefly analyze the data given in the table for each of the four potential suppliers. (Compare figures with

Question

1. Briefly analyze the data given in the table for each of the four potential suppliers. (Compare figures with
industry averages where necessary).
2. On the basis of the information given in the table, which potential supplier looks most attractive? Why?
A team consisting of an engineer, a financial analyst, a quality assurance engineer and a purchase
executive has been given the responsibility of recommending which of four potential suppliers should
receive purchase order for the requirements of the coming year for a particular component. Details about
the four suppliers are given in the table below:
A B C D Industry
average
Previous year’s sales
($ million)
6548.00 1850. 05 593.70 253.80
Net fixed assets
($ million)
1091. 80 212. 90 75. 80 20.63
Current stock price ($) 63.77 55.98 32.98 11.63
Price earnings ratio 18.50 6.45 7.15 34.50 12.00
Liquidity ratios
Current ratio 1.89 2.12 2.56 1.78 2.19
Quick ratio 1.14 1.02 1.28 0.99 1.08
Activity ratios
Average colle

Answer 1

If you are evaluating them as a supplier to your company, none of that information is really relevant. You only need to know the anser to 2 questions- 1) For the money, which company makes products with the best quality, and 2) Can they deliver product in a timely fashion.

If you are evaluating the companies as an investment, then your information provided becomes important.