PSA12.5 Calculate selected ratios, and compare liquidity, profitability and solvency for two entities. LO4 Selected financial data of two intense competitors in a recent year are presented here (in millions) Eastco Ltd Westco Ltd Statement of profit or loss data 40000 82 000 Net sales Cost of sales () (65 000) 32 000 7200) 13000) (13 000) Seig and administrative expenses (1 000) Finance expense (600) 800 200 Gain on sale of equipment (300) (1200) Income tax expense 700 2000 Profit Statement of financial position data (end-of-year) Current assets $11000 11000 Property, plant and equipment (net) 9 000 17 481 Total assets 20000 28481 Current liabilities $5 500 9 000 8 200 Non-current liabilities 11 000 Total equity 8 481 6 300 $ 20000 28 481 Total liabilities and equity Beginning-of-year balances 504 26441 Total assets Current liabilities 5 698 9 981 Total equity 6 093 10 753 Other data $ 5500 2200 Average net receivables Average inventory 5 000 8 000 Net cash provided by operating activities 1000 2 500 Required a. For each entity, calculate the following: 1. Current ratio. 2. Receivables turnover 3. Average collection period. 4. Inventory turnover 5. Average days in inventory. 6. Profit margin. 7. Asset turnover. 8. Return on assets. 9. Return on ordinary shareholders' equity. 10. Debt to total assets ratio. 11. Times interest earned. 12. Current cash debt coverage. 13. Cash return on sales ratio. 14. Cash debt coverage. (Hint: Use beginning of year information provided to calculate beginning of year balance for total liabilities.) b. Compare the liquidity, solvency and profitability of the two entities