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d) The following information was extracted from the financial stetements of Sunrise Ltd and Sunset Ltd. in respect of the wear ended 30 September 3015

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d) The following information was extracted from the financial stetements of Sunrise Ltd and Sunset Ltd. in respect of the wear ended 30 September 3015 Stetement of comprehensive income extracts for the weer ended 30 September 30I5: Sunrise Ltd Sunset Ltd Sh. '000 Sh. 000 Sales Cost of sales Operatina proft Interest expense 497,000 371,000 358,000 53,000 138,000 7,000 ,000 Statement of financial position extrects es at 30 September 3015: Sunrise Ltd Sh. 000' Sunset Ltd. Sh. 000' Non-current assets 42,000 Current assets Inventoru Debtors Cash at bank Current liabilities Lona-term loan 00,000 46,000 40,000 87,000 42,000 44,000 8,000 08,000 33,000 Shareholders funds 97,000 57,000 Required For each compand, compute the following ratios: G) Acid test ratio marks) (ii) nventoru turnover (i) Averaae collection period G) Return on capital emploued (a (a marks (a marks a marks Debt equitu retio (a marks (c) G) On the basis of the ratios compted in (b) above, comment on the overall performance of Sunrise Ltd. and Sunset Ltd. and advise which of the tuo companies would provide better investment. (3 marks) Explain the possible shortcominas of relaina on our analasis in (b) above

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