You are financial adviser to a retailing company, Us Ltd. You obtain the accounts of its main competitor operating in the same market, Them Ltd, and extract the comparison shown below:

Upon analysing this information, you observe that it reveals significant differences between the companies.
Required:

(a) Calculate and identify the key differences in profitability and in working capital management as between the two companies.

(b) Based upon the analysis at

(a) above, recommend actions which the management of Us Ltd should consider in order to improve their financial performance.

(c) State any reservations you may have about drawing conclusions from the comparative analysis of the two companies.

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Balance sheets as at 31 March 20X0 Fixed assets Land and buildings Fixtures and fittings Vehicles Us Ltd 000 000 000 000 381 342 62 785 Them Ltd 000 000 286 218 59 563 Current assets Stocks 96 Trade debtors 166 Cash 9 271 Current liabilities Overdraft 20 Trade creditors 132 Accruals 48 122 124 6 252 21 97 42 200 160 71 856 92 Shareholders' funds Share capital 470 350 Capital reserves 35 65 Profit and loss account 287 185 792 600 10% Debentures 64 55 856 655