ASSIGNMENT QUESTION The directors of C1 Ltd are concerned about the company's financial performance. They have obtained the financial statements of one of their competitors, Twice Ltd. Summarised below is some key financial information on the two companies: Return on capital employed Sales/capital employed Saleson-current assets Gross profit ratio Net profit ratio Current ratio Quick ratio (Acid test) Trade receivables collection period Trade payables collection period Inventory turnover Required: C1 Ltd 11.2% 0.67 times 0.73 times 33.9% 16.8% 1.35:1 0.87:1 106 days 126 days 4 times Twice Ltd 12.5% 1.14 times 1.33 times 24.0% 10.2% 1.57:1 0.81:1 60 days 60 days 5.1 times Comment on the key differences in performance between the two companies. (20 Marks) Based on your analysis, recommend actions which the directors of C1 Ltd should consider in order to improve the company's financial performance. (15 Marks) State any reservations you may have about drawing conclusions from the comparative analysis of two companies. (15 Marks) ASSIGNMENT QUESTION The directors of C1 Ltd are concerned about the company's financial performance. They have obtained the financial statements of one of their competitors, Twice Ltd. Summarised below is some key financial information on the two companies: Return on capital employed Sales/capital employed Saleson-current assets Gross profit ratio Net profit ratio Current ratio Quick ratio (Acid test) Trade receivables collection period Trade payables collection period Inventory turnover Required: C1 Ltd 11.2% 0.67 times 0.73 times 33.9% 16.8% 1.35:1 0.87:1 106 days 126 days 4 times Twice Ltd 12.5% 1.14 times 1.33 times 24.0% 10.2% 1.57:1 0.81:1 60 days 60 days 5.1 times Comment on the key differences in performance between the two companies. (20 Marks) Based on your analysis, recommend actions which the directors of C1 Ltd should consider in order to improve the company's financial performance. (15 Marks) State any reservations you may have about drawing conclusions from the comparative analysis of two companies. (15 Marks)