Company X '000 INCOME STATEMENTS Turnover Opening inventory Purchases '000 80,000 26,000 51,000 77,000 (14,000) Company Y '000 '000 110,000 20,500 90,500 111,000 (18,000) (93,000) 17,000 Closing inventory Cost of Sales Gross profit Expenses Depreciation Other expenses (63,000) 17,000 (1,200) (9,300) (4,000) (4,500) (10,500) 6,500 (500) 6,000 (1,400) 4,600 (8,500) 8,500 (1,000) 7,500 (1,700) 5,800 Operating profit Interest paid Profit before tax Taxation Net Profit Statement of Financial Position ASSETS Non-current Assets Equipment at cost Depreciation Net Book Value Current Assets Inventory Receivables Bank 12,000 (8,000) 22,500 (6,500) 4,000 16,000 14,000 22,000 6,000 18,000 19,000 3,500 42,000 40,500 (7,000) (12,000) LIABILITIES Current Liabilities Trade payables Non-current Liabilities Bank loan Net Assets CAPITAL Ordinary share capital Retained profit (5,000) 34,000 (10,000) 34,500 15,000 19,000 34,000 22,000 12,500 34,500 m/5d3eae3a0d8df/4170964?X-Blackboard-Expiration 1 1 1 100% + TASK 2: Report Layout: Please provide a table of contents, introduction, main body including interpretation/analysis, conclusion, and bibliography. In the task 2 of the assignment, you should initially focus on calculating the ratios for both the companies correctly. If you have errors in the calculations, interpretation can be difficult since you are trying to explain an incorrect result. Include the following in the main report: a. Assess the performance of the businesses based on PROFITABILITY and EFFICIENCY ratios ONLY. b. Calculate the profitability and efficiency ratios for both the companies in the following layout: Appendix Ratio calculation Ratios Formula Company A Company B Operating profit tatio Operating profit X 100 me vonowing you Appendix Ratio calculation 1) Ratios Formula Company A Company B Operating profit ratio Operating profit x100 Revenue -8.5 x100 = 2.19% 386.4 -5.2 x100 = -1.16% 446.3 Gross profit ratio gross profit x100 Revenue 210.4 x100 =54.45% 386.4 250.3 x100 = 56.08% 446.3 You should clearly show all the formulae and calculations in the appendices. The figures should be rounded to 2 decimal places. c. An overall conclusion summarizing your observations in relation to which company is better for investment based on profitability and efficiency of the companies. A specified word count of Task 2 refers to the main body of the report and does not include the title page, contents page and appendices. 19:23 Company X '000 INCOME STATEMENTS Turnover Opening inventory Purchases '000 80,000 26,000 51,000 77,000 (14,000) Company Y '000 '000 110,000 20,500 90,500 111,000 (18,000) (93,000) 17,000 Closing inventory Cost of Sales Gross profit Expenses Depreciation Other expenses (63,000) 17,000 (1,200) (9,300) (4,000) (4,500) (10,500) 6,500 (500) 6,000 (1,400) 4,600 (8,500) 8,500 (1,000) 7,500 (1,700) 5,800 Operating profit Interest paid Profit before tax Taxation Net Profit Statement of Financial Position ASSETS Non-current Assets Equipment at cost Depreciation Net Book Value Current Assets Inventory Receivables Bank 12,000 (8,000) 22,500 (6,500) 4,000 16,000 14,000 22,000 6,000 18,000 19,000 3,500 42,000 40,500 (7,000) (12,000) LIABILITIES Current Liabilities Trade payables Non-current Liabilities Bank loan Net Assets CAPITAL Ordinary share capital Retained profit (5,000) 34,000 (10,000) 34,500 15,000 19,000 34,000 22,000 12,500 34,500 m/5d3eae3a0d8df/4170964?X-Blackboard-Expiration 1 1 1 100% + TASK 2: Report Layout: Please provide a table of contents, introduction, main body including interpretation/analysis, conclusion, and bibliography. In the task 2 of the assignment, you should initially focus on calculating the ratios for both the companies correctly. If you have errors in the calculations, interpretation can be difficult since you are trying to explain an incorrect result. Include the following in the main report: a. Assess the performance of the businesses based on PROFITABILITY and EFFICIENCY ratios ONLY. b. Calculate the profitability and efficiency ratios for both the companies in the following layout: Appendix Ratio calculation Ratios Formula Company A Company B Operating profit tatio Operating profit X 100 me vonowing you Appendix Ratio calculation 1) Ratios Formula Company A Company B Operating profit ratio Operating profit x100 Revenue -8.5 x100 = 2.19% 386.4 -5.2 x100 = -1.16% 446.3 Gross profit ratio gross profit x100 Revenue 210.4 x100 =54.45% 386.4 250.3 x100 = 56.08% 446.3 You should clearly show all the formulae and calculations in the appendices. The figures should be rounded to 2 decimal places. c. An overall conclusion summarizing your observations in relation to which company is better for investment based on profitability and efficiency of the companies. A specified word count of Task 2 refers to the main body of the report and does not include the title page, contents page and appendices. 19:23