QUESTION 2 Olu is a trader who has been in business for several years. Yaro started a similar business in a nearby town two years ago. The following information are extracted from the financial statements of Yaro for the year ended 31 December 2019: 50,000 GHC Inventory - 01 January 2019 5,100 Revenue - Credit Sales 100,000 Purchases - Cash purchases 26,600 - Credit purchases Cost of Sales 76,000 Expenses 13.500 As at 31 December 2019: Inventory 5,700 Trade Receivables 10.900 Bank Overdraft 6,600 Trade Payables 5,000 Capital Employed 115,000 Required: A. Complete the table below by calculating the following respective accounting ratios for Yaro Oly Yaro Return on Capital Employed 10.49% Gross Profit as a percentage of Sales 20% Net Profit as a percentage of Sales 12.50% iv. Current Ratio 2.50:1 Quick Ratio 1.82:1 vi Rate of Inventory Turnover 12 times vil Collection period of trade receivables 35 days Payment period of trade payables 48 days 16 Marks B. Using the ratios calculated in (A) above, compare the performance of the two business in terms of profitability and liquidity. 4 Marks C. Financial benchmarking will allow a business owner to understand how his organization is running financially against other businesses in the same industry. Explain what you understand by Financial Benchmarking and mention any four metrics used in financial benchmarking. 5 marks Total - 25 Marks