(a) The following ratios have been extracted from an analysis of the accounts of three companies –

North, South and East:

Nor th South East Profit/Sales " 100 5% 4% 3%

Asset turnover 5 times 3 times 4 times Financial leverage 2 4 5 Required:

Comment on the respective performance of each of the three companies.

(b) ‘The consolidation of financial statements hides rather than provides information.’ Discuss.