Required:

As the companys financial advisor, you have been asked for your assessment of the two companies, from the particular view points of:

Liquidity; Profitability; Capital structure; Efficiency.

II. Evening Books Limited is considering the acquisition of a bookbinding company to expand its publishing interests. Its chief executive has highlighted two possible targets, Crawl Binding Limited and Tripot Publishing Services Limited. The following information has been obtained for their most recent financial years: Crawl Binding Tripot Publishing 16,000 10,000 6,500 10,000 Income Statement Sales (-)Cost of Sales Gross Profit (-) Distribution expenses Administration expenses Profit before tax (-) Taxation Profit after tax 68,000 (30,000) 38,000 (26,000) 12,000 (3.000) 9,000 61,500 (38,000) 23,500 (16,500) 7,000 (1,750) 5,250 18,000 8,000 10,600 15,000 25,600 8,300 14,000 28,000 10,000 2.000 22,300 20,000 6,000 Balance Sheet Non-current Assets Current Assets Inventory Account receivables Cash Current Liabilities Creditors Bank overdraft Net current Assets Total Assets less Current Liabilities 46,000 25,000 5.000 31,000 6,000 12,000 10,000 5,600 10,300 15.600 Capital and Reserves Common Stock Retained earnings Long-term Loan Total Equity and Long Term Liabilities 22,300 10,000 25,600 22,300 II. Evening Books Limited is considering the acquisition of a bookbinding company to expand its publishing interests. Its chief executive has highlighted two possible targets, Crawl Binding Limited and Tripot Publishing Services Limited. The following information has been obtained for their most recent financial years: Crawl Binding Tripot Publishing 16,000 10,000 6,500 10,000 Income Statement Sales (-)Cost of Sales Gross Profit (-) Distribution expenses Administration expenses Profit before tax (-) Taxation Profit after tax 68,000 (30,000) 38,000 (26,000) 12,000 (3.000) 9,000 61,500 (38,000) 23,500 (16,500) 7,000 (1,750) 5,250 18,000 8,000 10,600 15,000 25,600 8,300 14,000 28,000 10,000 2.000 22,300 20,000 6,000 Balance Sheet Non-current Assets Current Assets Inventory Account receivables Cash Current Liabilities Creditors Bank overdraft Net current Assets Total Assets less Current Liabilities 46,000 25,000 5.000 31,000 6,000 12,000 10,000 5,600 10,300 15.600 Capital and Reserves Common Stock Retained earnings Long-term Loan Total Equity and Long Term Liabilities 22,300 10,000 25,600 22,300