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Submit a soft copy through the safeassign icon created in the Black Board - Assignment Example The quick ratio is calculated by dividing the sum of cash and receivables by current liabilities. Unlike the current ratio, the quick ratio ignores inventories and other current assets that may have doubtful liquidity. A satisfactory quick ratio, depending on the history of collecting debts is 1:1. The quick ratio of Ooredoo is (20,203,819/23,531,834) = 0.86 while that of Vodafone is (172,166/1,004,395) = 0.17. Creditors concentrate on the working capital as it deals more with cash flows. Working capital is the difference between current assets and current liabilities. Most banks tie loan approvals on a company’s minimum working capital requirement. The working for Ooredoo is (28,361,079-23,531,834) = 4,829,245 while that of Vodafone is (425,302-1,004,395) = -579,093. The leverage ratio shows the extent to which a company relies on debt to keep operating. Creditors such as banks and suppliers are more concerned by this ratio. Leverage ratio is calculated by dividing total liabilities by the net worth of the company. The higher the ratio the more risky it becomes to extend credit to the company. The leverage for Ooredoo Company is (23,531,834/97,415,655) = 0.24 while that of Vodafone is (1,795,200/7,753,696) = 0.23. The gross profit ratio is calculated by dividing gross profits by net sales. Different industries have a standard guideline of the gross profit ratio with which companies can compare their specific numbers. Companies need to keep track of the trend of the gross profit ratio and ensure it does not deviate away from the target. The gross profit ratio for Ooredoo Company is (3,895,146/33,851,340) = 0.12 while that of Vodafone is (343,586/1,431,670) = 0.24. The return on assets ratio indicates how a company efficiently utilizes its assets. This ratio is calculated by dividing net profits by total assets. Bankers and investors calculate this ratio by dividing net pre-tax profit by total assets.