PLZ HELP

The financial statements of X Ltd and Y Ltd, two companies in the same industry, for the years ended 31 December 2020 and 2021 are presented below.

1. Calculate the relevant financial ratios to assess the profitability and liquidity of the two companies in 2020 and 2021. [15 marks]

2. b) Prepare a report based on the financial information provided and the relevant financial ratios to assess the relative profitability and liquidity of X and Y in 2020 and 2021.

3. c) Prepare a report based on the DuPont analysis for each company to discuss the change in Return on Equity (ROE) between 2020 and 2021.

Income Statement Revenue Cost of sales Gross profit Other operating expenses Operating profit Interest Profit before tax Tax Profit after tax 2021 2,000 1,000 1,000 200 800 40 760 70 690 2020 1,950 950 1,000 185 815 30 785 75 Y 2021 2,020 1,020 1,000 150 850 25 825 80 745 2020 1,960 960 1,000 120 880 20 860 90 770 710 70 620 70 640 80 665 80 690 Dividends Retained profit Retained earnings brought forward Retained earnings carried forward 200 150 50 000 820 790 715 690 Balance Sheet Non current assets Inventory Receivables Cash Total Assets Share capital Retained profit Total Equity Current liabilities Long-term loans Total Liabilities Total Equity and Liabilities 2021 1900 170 130 100 2,300 550 820 1,370 430 500 930 2,300 2020 1,870 160 115 130 2,275 550 790 1,340 435 500 Y 2021 1,555 300 150 30 2,035 510 715 1,225 500 2020 1,540 300 140 30 2,010 510 690 1,200 500 310 810 2,010 310 935 810 2,035 2,275 Income Statement Revenue Cost of sales Gross profit Other operating expenses Operating profit Interest Profit before tax Tax Profit after tax 2021 2,000 1,000 1,000 200 800 40 760 70 690 2020 1,950 950 1,000 185 815 30 785 75 Y 2021 2,020 1,020 1,000 150 850 25 825 80 745 2020 1,960 960 1,000 120 880 20 860 90 770 710 70 620 70 640 80 665 80 690 Dividends Retained profit Retained earnings brought forward Retained earnings carried forward 200 150 50 000 820 790 715 690 Balance Sheet Non current assets Inventory Receivables Cash Total Assets Share capital Retained profit Total Equity Current liabilities Long-term loans Total Liabilities Total Equity and Liabilities 2021 1900 170 130 100 2,300 550 820 1,370 430 500 930 2,300 2020 1,870 160 115 130 2,275 550 790 1,340 435 500 Y 2021 1,555 300 150 30 2,035 510 715 1,225 500 2020 1,540 300 140 30 2,010 510 690 1,200 500 310 810 2,010 310 935 810 2,035 2,275