P.6.8 The information below is taken from the records of two companies in the same industry. The companies are X Ltd and Y Lid; and the data is as follows: Particulars X Ltd Y Ltd Cash 2,10,000 3,20,000 Debtors (net) 3,30,000 6,30,000 Stock 12,30,000 9,50,000 Plant and equipment 16,95,000 24,00,000 Total assets 34,65,000 43,00,000 Sundry creditors 9,00,000 10,50,000 8% Debentures 5,00,000 10,00,000 Equity share capital 11,00,000 17,50,000 Retained earnings 9,65,000 5,00,000 Total liabilities 34,65,000 43,00,000 Sales 56,00,000 82,00,000 (Contd.) y18 (Contd.) Cost of goods sold 40,00,000 64,80,000 Other operating expenses 8,00,000 8,60,000 Interest expenses 40,000 80,000 Income taxes 2,66,000 2,73,000 Dividends 1,00,000 1,80,000 Answer each of the following questions by making a comparison of one or more, relevant ratios. (1) Which company is using the equity shareholders' money more profitably? (11) Which company is better able to meet its current debts? (iii) If you were to purchase the debentures of one company, which company's debentures would you buy? (iv) Which company collects its receivables faster, assuming all sales to be credit sales (v) Which company is extended credit for a longer period by the creditors, assuming all purchases (equivalent to cost of goods sold) to be credit purchases? (vi) How long does it take each company to convert an investment in stock to cash? (vii) Which company retains the larger proportion of income in the business