QUESTION 4 (25 marks) Below are financial statement for three unrelated companies. One company is an estate agent, one is a supermarket chain and one is a car manufacturer. STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 MARCH 2020 A Ltd B Ltd C Ltd N$,000 N$,000 N$,000 Sales 12,000 4,150 25.300 Cost of sales (3,170) (1,645) (14,600) Gross profit 8.830 2,505 10,700 Operating expenses (8,480) (1,475) (8,900) Operating profit 350 1.030 1,800 Finance costs (70) (74) (220) Profit before taxation 280 956 1,580 Income for the period (84) (287) (474) Profit for the period 196 669 1,106 STATEMENT OF FINANCIAL POSITION FOR THE YEAR ENDED 31 MARCH 2020 A Ltd C000 B Ltd C000 C Ltd C000 3,400 500 11,500 293 1.250 155 40 1,055 4,650 4,580 1,200 2,800 150 143 793 580 16.080 Assets Non-current assets Property, plant and equipment Current assets Inventories Accounts receivable Cash TOTAL ASSETS Equity and Liabilities Capital and reserves Ordinary share capital Retained earnings Current liabilities Accounts payable TOTAL EQUITY AND LIABILITIES 3,450 100 3,750 474 100 374 12,830 200 13,630 1,200 4.650 319 793 2.250 16.080 The following key ratios have been correctly calculated for A Ltd Ratio 2020 Operating profit margin 2.9% Sales to total assets 2,6 times Current ratio 1,04:1 Inventory holding period 18 days Accounts receivable collection period 1 day REQUIRED: 1. Calculate the same key ratios for B Ltd and C Ltd (10 marks) i. Operating profit margin Sales to total assets Current ratio iv. Inventory holding period v. Accounts receivable collection period 2. Considering each company in turn, discuss with reason, which of A Ltd, B Ltd and C Ltd is like to be the estate agent, the supermarket chain and the car manufacturer You should use all five ratios in your discussion of each company. (15 marks) ***End of assignment