Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

In the table below is data taken from the published accounts of two construction companies for the 2015 financial year. All figures are in $

image text in transcribed
In the table below is data taken from the published accounts of two construction companies for the 2015 financial year. All figures are in $ million. You have been employed as a consultant at Company A. The management would like you to provide them with some accurate financial information as to the profitability and liquidity position of the company and your advice on whether the company has an advantage or disadvantage over its main competitor, Company B. Sales Inventories revenue Capital Non- Current Current Gross Operating employed current liabilities assets profit profit liabilities 3000 1500 1200 1400 1100 750 Company 4000 400 Company 200 50 70 70 75 25 300 35 1. Using the financial information given, calculate as many of the profitability ratios and liquidity ratios for 2015 as you have information for. Do this for both companies. (5 marks] 2. Using your results, compare the performance and liquidity of these two businesses. [5 marks] 3. Explain the limitations of the ratio analyses you have just undertaken. [5 marks] 4. Explain what additional information would be useful when making this comparison. [5 marks) In the table below is data taken from the published accounts of two construction companies for the 2015 financial year. All figures are in $ million. You have been employed as a consultant at Company A. The management would like you to provide them with some accurate financial information as to the profitability and liquidity position of the company and your advice on whether the company has an advantage or disadvantage over its main competitor, Company B. Sales Inventories revenue Capital Non- Current Current Gross Operating employed current liabilities assets profit profit liabilities 3000 1500 1200 1400 1100 750 Company 4000 400 Company 200 50 70 70 75 25 300 35 1. Using the financial information given, calculate as many of the profitability ratios and liquidity ratios for 2015 as you have information for. Do this for both companies. (5 marks] 2. Using your results, compare the performance and liquidity of these two businesses. [5 marks] 3. Explain the limitations of the ratio analyses you have just undertaken. [5 marks] 4. Explain what additional information would be useful when making this comparison. [5 marks)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Standards And Audits For Ethics Management Systems The European Perspective

Authors: Josef Wieland

1st Edition

3642072925, 978-3642072925

More Books

Students also viewed these Accounting questions