QUESTION 1: Analyse the sources of finance for each of the two companies in 2017 as compared to 2016. Use two capital structure ratios to support your answer and provide an explanation regarding the changes in the composition of the sources of finance for each enterprise. Note: ensure that you analyse in this question, not just describe the ratio values. (2 marks)

CAPILANO HONEY LIMITED -

Sources of finance -

Debt ratio=

Interest coverage ratio=

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QUESTION 2: For each of the two companies, analyse their ability to successfully manage each of their categories of expenses in 2017 as compared to 2016. Use three margin ratios to support your answer and explain any change in the ability of each company to control costs. Note: ensure that you analyse in this question, not just describe the ratio values. (3 marks)

CAPILANO HONEY LIMITED -

SELECT HARVEST -

QUESTION 3: Analyse the ability of management to manage their fixed and total assets for each of the two companies in 2017 as compared to 2016. Use two Asset Management efficiency ratios to support your answer and explain any change in each companies' ability to use their assets to generate sales. Note: ensure that you analyse in this question, not just describe the ratio values. (2 marks)

CAPILANO HONEY LIMITED-

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QUESTION 4: Analyse the profitability of invested capital for each of the two companies in 2016 as compared to 2017. Based on your calculations and your answers to questions 2 and 3, explain the main reason(s) for the change in the profitability for each company over the two years. Note: ensure that you analyse in this question, not just describe the ratio values. (3 marks)

CAPILANO HONEY LIMITED-

SELECT HARVEST-

QUESTION 5: Given your answers and analysis in questions 1 to 4, what is your final recommendation: an approval or denial of the loan to each and/or both firms? Discuss the basis for your recommendation. (4 marks)