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Question 1 (a) The table below shows the ratios for two companies. Unfortunately, the accounts clerk who computed the ratios made an error and is
Question 1 (a) The table below shows the ratios for two companies. Unfortunately, the accounts clerk who computed the ratios made an error and is now unsure of the identities of the two companies. Possible candidates are: a bubble tea company, a sporting shoe and apparel retailer, and a heavy equipment manufacturer. COMPANY 1 2 0.1 0.3 60.0 15.0 Debt-equity Inventory Turnover Current Ratio Sales/Total Assets Sales/Receivables 0.5 0.9 15.0 90.0 8.0 60.6 Interpret the ratios in the table above to identify the two (2) companies and briefly discuss one (1) reason in the following format: The bubble tea company is likely to be company 1 /2/ none of them (choose one (1) Reason: The sporting shoe and apparel retailer is likely to be company 1 /2/ none of them (choose one (1) Reason: The heavy equipment manufacturer is likely to be company 1 /2/ none of them (choose one (1)). Reason: Note: For your answer, you do not have to follow the same order as the listing of the companies above. (10 marks)
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