(3) Extended exercise

Phillip Co. and Sarkis Inc. recently published their annual reports. As a prospective investor, youre interested in finding out about their cash holdings, and seeing how the businesses compare. Some of their financial data is provided below. Please note that all amounts for the accounts (other than cash and cash equivalents at 30 June 2024) are stated as at 30 June 2025.

	Phillip Co.	Sarkis Inc.
Cash and cash equivalents at 30 June 2024	$240 136	299 000
Cash flows from operating activities	50 000	80 000
Total assets	400 000	460 000
Dividends	12 000	0
Cash flows from financing activities	8 050	25 000
Cash and cash equivalents at 30 June 2025	286 190	350 000
Accounts receivable	45 000	22 000
Capital expenditure	16 000	50 000
Current assets	350 000	399 000
Cash flows from investing activities	19 000	(6 500)

Required

1. Using MS Excel, conduct horizontal and vertical analysis for the account 'cash and cash equivalents', and interpret your results. Express your answer as a % and round your answer to two decimal places. Please note that you only need to complete vertical analysis of cash and cash equivalents for the year 2025.
2. In the same MS Excel spreadsheet, calculate free cash flow for each company and interpret your results.
3. Comment on how the cash positions of each company compare based on the results of your horizontal and vertical analysis.