Required:

Using the above information evaluate each companys profitability, liquidity and solvency. Your discussion should compare both companies to each other and to the industry average. (6 marks) Word limit 200.

Rozelle Ltd and Balmain Ltd have provided the following information, which relates to the year ended 30 June 2020. Rozelle Ltd Balmain Ltd Industry Average Current ratio 1.03:1 1.91:1 1.65:1 Quick ratio 0.77:1 1.09:1 0.95:1 Times interest earned ratio 3.1 times 5.9 times 5.3 times Debt to asset ratio 101.4% 70.2% 75.3% 17.22% 11.52% 14.85% Return on shareholders' equity Return on assets 18.10% 12.31% 15% 55 days 60 days Inventory turnover (days) 65 days Receivable turnover (days) 78 days 48 days 47 days