ANALYSIS AND INTERPRETATION The summarised financial information provided below is for two companies which operate in the same industry group. Statement of Financial Position As at 31 March 2019 1. COMPANY A $e CURRENT ASSETS Cashe Accounts Receivable Inventory 6,180 105,410 121,8752 COMPANY Be $e 7,692 137,724 96,817 242,233 1.1.1.1.1.1. 233,465 1.1. INVESTMENTS Shares in other Companiese 41,000+ 39,000 1.1. Non-Current Assets Land and Buildings Plant and Equipment Motor Vehicles 217,7162 58,824 264,4124 342,113 61,4182 371,797e 1.1. 1. 1. 540,952 815,417 775,328 $ 1,056,5612 1. $ 1. CURRENT LIABILITIES Bank Overdrafte Accounts payable 21,000 138,819 20,000 180,494 159,819 200,494 1.1.1.1.1.1.1.1. TERM LIABILITY Loane 55,000 64,000 1. Owner's Equity Capitale Retained Earningse 350,000 250,598 470,000 322,067e 1.1.1.1. 600,598 815,417 792,0672 1,056,5612 1. (Net of Depreciation) 1. INCOME STATEMENTE FOR THE YEAR ENDING 31 MARCH 2019 COMPANY B COMPANY A $e 747,138 $e $e 569,9774 Salese Cost of Salese Opening Inventory Purchases Cost of Goods Available for Salee Closing Inventory 1.1.1.1.1.1.1.1.1.1. 101,714 587,8812 689,595 121,875 92,2102 381,1702 473,380 96,817 1.1. 567,720 179,418 376,563 193,4142 GROSS PROFIT 1. 1.1.1. Operating Expenses Selling and Distributione Administratione Financiale 64,144 31,3322 8,779 59,724 29,1402 8,6402 1.1. 104,255 75,163 97,504 95,910 NET PROFIT You have received a request from a client to prepare a report on the two companies A and B. Specifically your client requires you to compare the profitability of operations and analyse the short term financial strength of the two firms. YOU ARE REQUIRED TO: a. For each company calculate six ratios which you consider to be appropriate for indicating the profitability and financial strength of the company. b. Using the financial information provided above and the ratios you have calculated, prepare a report which analyses and compares the Income Statements and the short term financial strength of A and B companies. Your report should include at least 10 points and should contain recommendations