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Part A (4 marks) Abbotsford Ltd and Balmain Ltd have provided the following information, which relates to the year ended 30 June 2022. Abbotsford Ltd
Part A (4 marks)
Abbotsford Ltd and Balmain Ltd have provided the following information, which relates to the year ended 30 June 2022.
| Abbotsford Ltd | Balmain Ltd | Industry Average |
Return on assets | 13.31% | 19.10% | 15% |
Current ratio | 1.03:1 | 1.91:1 | 1.5:1 |
Debt to asset ratio | 71.2% | 103.4% | 90.3% |
Inventory turnover (days) | 55 days | 65 days | 60 days |
Receivable turnover (days) | 48 days | 78 days | 60 days |
Profit margin | 12.52% | 18.22% | 14.75% |
Required:
Using the above information, evaluate each companys liquidity and profitability. (4 marks)
Word limit 200.
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