COMPARATIVE ANALYSIS PROBLEM: Company A vs. Company B

BBS11.2 The following data have been extracted from the financial statements of two competitors in the retail industry:

Company A

	2017 $000	2016 $000
Sales revenue	505 754	461 205
Net cash provided by operations	113 393	101 126
Current liabilities	112 907	130 769
Total liabilities	124 497	149 139

Company B

	2017 $000	2016 $000
Sales revenue	744 285	693 007
Net cash provided by operations	131 615	71 926
Current liabilities	188 896	162 582
Total liabilities	387 638	334 298

Required

a) Based on the information in these financial statements, calculate the following ratios for each entity for 2017:

1.Current cash debt coverage.

2.Cash return on sales ratio.

3.Cash debt coverage.

b) What conclusions concerning the management of cash can be drawn from these data?