Question 4 Daniel, an investor is considering purchasing shares in either Garth Ltd & James Ltd. Both companies are in the same line of business and their accounts are summarized below: Statement of financial Position as at December 1st 2016 Assets Garth Ltd James Ltd. Non Current Assets S'000 S'000 S'000 S'000 2 140 840 At Cost Accumulated Depreciation (226) 1 852 614 (280) Current Assets 276 334 Inventory Receivables 138 196 Bank and Cash 192 606 18 548 1 220 2 400 Equity and Liabilities 1 800 apital 740 Retained Earnings 340 138 1938 1 080 Non-Current Liabilities 10% loan Note 160 Current Liabilities Trade payables 120 240 Interest payable 2 Income tax 140 60 302 1 220 2400 20 Income Statement for the year Ended 31 December 2016 James Ltd Garth Ltd. S'000 s'000 S'000 $'000 Sales revenue 1192 356 Cost of Sales (788) (1 052) Gross Profit 404 304 Expenses: Administrative 72 90 Selling $ Dist 106 112 Depreciation 28 38 Loan note interest (206) 16 (256 Net Profit 198 48 Required: A. Calculate the following SIX (6) ratios for both companies, showing clearly the ratio formulae and figures used: i. Current ratio ii. Quick ratio (acid test ratio) iii. Receivables collection Period iv. Return on capital employed v.Gross profit Percentage vi. Net Profit percentage (21 marks) B. Using the ratios calculated in (A) above, outline four comments in line with areas such as liquidity, solvency, profitability or efficiency that will inform Patrice on the performance and position of Garth's Ltd. and James's Ltd. (4marks)