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QUESTION TWO [25] Extracts of the Statement of Comprehensive Income for the year ended 31 December 2021 and the Statement of Financial Position as at

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QUESTION TWO [25] Extracts of the Statement of Comprehensive Income for the year ended 31 December 2021 and the Statement of Financial Position as at 31 December 2021 are given below for two companies viz. Ash Limited and Burton Limited Extract of Statement of Comprehensive income for the year ended 31 December 2021: Additional infocmationc - Invectocies as at 31 December 2020 are as follows: Ash Linted Re90 060 Burton Limitod R230 000 - All sales and purchases of inventoties are on credt. Required: Compare the performance of Rsh Limited and Burton Limited (poth in same industry) with regard to the foliowing ratios and in each case state your observations: 2.1 The ability of esch company to tepay as thort term dects without relying on sae of is invertiofies. (5) 22 The return eamed by shsteholders on their investmient. (5) 23 The operational ellectiveness of each company before considering interest income, interest expense and income tax (5) 2.4 The effectiveness with which the goods for sale have been managed. (3) 2.5 An evaluation of each compary's performance wath regard to the managemert of ts trade credaons. (7)

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