Peanut Queen and Lord of Ice are two competitors selling ice-cream. Below is the information pertaining to the two businesses for the financial year ended June 30, 2021.

	Peanut Queen	Lord of Ice
Net Profit ($)	105,000	280,000
Cost of Goods Sold ($)	100,000	1,000,000
Total Assets ($)	500,000	800,000
Total Liabilities	250,000	300,000
Gross Profit ($)	110,000	600,000

Lisa has capital to invest in one of the businesses. She likes peanut butter ice-cream but needs to consider the financial performance of the two businesses to make an informed investment decision.

Required:

In the table below, calculate Net Profit Margin, Asset Turnover, Financial Leverage, and Return on Equity (ROE) ratios for the two businesses.

(4 marks)

	Peanut Queen	Lord of Ice
Net Profit Margin
Asset Turnover
Financial Leverage
ROE

Based on the financial performance alone, which one of the two businesses would you recommend to Lisa to invest in? Considering the components of the DuPont model, which component is driving the financial performance of the business you chose?

(2 marks)

Answer here:

Provide one example of non-financial information Lisa could consider in addition to the ratios calculated above when choosing between the two businesses. Briefly explain how that example of non-financial information could assist Lisa in her decision-making process.