a) Compute the following ratios for both business entities and provide comments for each of the ratios. Gross profit margin, Net Profit Margin,Current Ratio, Quick Acid Ratio,Inventory Turnover,Average Collection Period (Account Receivable Turnover Ratio)

Green Trading and Pink Trading are in similar trading industries. Below are the financial statements of both business for the year ended 31 December 2019. Statement of Profit or Loss and Other Comprehensive Income For the year ended 31 December 2019 Green Pink Trading Trading RM RM Sales revenue 49,600 61,200 Less: Cost of goods sold Opening inventories 7,800 5,400 Purchases 25,000 37,200 Closing inventories (9,300) (8,800) 23,500 33,800 Gross profit 26,100 27,400 Expenses (10,500) (9,300) NET Profit for the year 15,600 18,100 Statement of Financial Position as at 31 December 2019 Green Pink RM RM ASSETS Non-Current Assets 58,000 56,400 Current assets Inventories 9,300 8,800 Trade receivables 4,200 22,700 Prepayment 600 Bank 28,500 55,900 88,000 42,000 100,000 Total assets 144,400 EQUITY AND LIABILITIES 58,000 100,000 Capital Add: Net profit Less: Drawings 15,600 18,100 (300) 72,300 (1,000) 117,100 Current liabilities 26,700 87,300 Total equity and liabilities 100,000 144,400