Compare XM Satellite Radio, Inc., and Sirius Satellite Radio, Inc., using a thorough financial ratios analysis.
(a) For each company, compute all the ratios listed in Figure 2.5 (i.e., debt management, liquidity, asset management, market trend, and profitability) for the year 2005.
(b) Compare and contrast the two companies, using the ratios you calculated from part (a).
(c) Carefully read and summarize the “risk management” or “hedging” practices described in the financial statements of each company.
(d) If you were a mutual-fund manager and could invest in only one of these companies, which one would you select and why? Be sure to justify your answer by using your results from parts (a), (b), and (c).