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Alpha plc & Beta plc are two companies operating in the same business sector. Their recent financial statements are as follows: Statement of financial position

Alpha plc & Beta plc are two companies operating in the same business sector. Their recent financial statements are as follows:

Statement of financial position at 31 December 2020

Alpha plc

Beta plc

m

m

Non-current assets

566

820

Current assets:

- Inventory

280

320

- Trade receivables/debtors

180

166

Total assets

1026

1306

Liabilities

Current liabilities

- Trade payables/creditors

164

300

- Bank overdraft

38

234

- Corporation tax

40

34

242

568

Non-current liabilities

200

0

Total liabilities

442

568

Equity

Share capital (1 share each)

330

510

Retained profits

254

228

584

738

--------

--------

Total liabilities and equity

1026

1306

Income statement for the year ended 31 December 2020

Alpha plc

Beta plc

Sales

1,600

1,280

Cost of sales

1,300

956

Gross profit

300

324

Operating expenses

156

198

Operating profit

144

126

Finance expenses

18

12

Profit before tax

126

114

Tax

40

34

Profit after tax

86

80

Additional notes:

  1. During the year Alpha plc proposed and paid a total dividend of 41M and Beta plc proposed and paid a total dividend of 38M.
  2. The price of each share at 31 December 2020 was 4.25 for Alpha plc and 3.26 for Beta plc

Question

  1. Calculate the following ratios, to one decimal place, for the two companies:
    1. Operating profit margin
    2. Quick ratio
    3. Current ratio
    4. Trade receivables/debtors collection period
    5. Trade payables payment period

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