Go to Connect online for the financial statements of Cadbury plc and to Appendix A of this book for the financial statements of the Nestlé Group.

Required:

1. Compute the quality of earnings ratio for both companies for the current year. How might the difference in their sales growth rates explain the difference in the ratio? Sales growth rate \(=\) (Current year's sales - Prior year's sales) \(\div\) Prior year's sales.

2. Compute the capital acquisitions ratio for both companies for the current year. Compare their abilities to finance purchases of property, plant, and equipment with cash provided by operating activities.