Question 1 Mega Ltd is considering the purchase of shares in either Neeko Ltd or Saxony Ltd. Both companies are in the same line of business and their accounts are summarised below: Statement of Profit or Loss for the year ended 31 December 2021 Statement of Financial Position as at 31 December 2021 NeekoSmilSaxonySmil Assets Non-Current Assets Property, plant and equipment Current Assets \begin{tabular}{lrr} Inventory & 1,515 & 27 \\ Trade receivables & 2,101 & 16 \\ Cash and cash equivalents & 634 & 35 \\ & 4,250 & 78 \\ & & 93 \\ Total Assets & 5,871 & \\ \hline \end{tabular} Equity and Liabilities Share capital and reserves Ordinary share capital (S1 each) Retained earnings \begin{tabular}{rr} 3 & 3 \\ 3,640 & 54 \\ \hline 3,643 & 57 \end{tabular} Non-Current Liabilities Long-term loan (payable in 2025) 708 19 Current Liabilities Trade payables Accrued expenses Current Tax Payable Total Equity and liabilities \begin{tabular}{rr} 573 & 9 \\ 840 & 8 \\ 107 & \\ \hline 1,520 & 17 \\ 5,871 & 93 \\ \hline \end{tabular} Required: (a) Compute the following ratios for Neeko and Saxony for the current year: (i) Gross profit margin. (ii) Net profit margin (based on profit after tax). (iii) Current ratio. (iv) Receivables days. (v) Inventory days. (b) Appraise the financial situations of Servia Ltd and Neeko Ltd for the financial year ended 31 December 2021 , based on both the ratios calculated in part (a) and any additional information provided in the financial statements