The financial information provided below is for two companies which operate in similar retail fields, using the same business and accounting policies

A. Calculate for each company, ratios that shows the financial position, which you consider most appropriate for indicating the efficiency of operations and short-term financial strength of the two firms.

B. interpret the results and point out weaknesses, if, any, in the computations above.

Apt Financial Consultants Amana Ltd. TShs.'000 Balance Sheets as at 30 June 1995 Bungoni Ltd. Tshs.'000 Amana Ltd. Tshs. 1000 570,000 Share Capital & Reserves Profit or Loss Accounts for the Year Ended 30 June 1995 Bungoni Ltd. TShs."000 Sales 747,000 Cost of Sales Opening Stock 102.000 Purchases 588.000 Closing Stock (122,000) Cost of Sales 568,000 Issued Capital Capital Reserves Revenue Reserves 350,000 65.000 185.000 470,000 35.000 287,000 92.000 381.000 (96.000) 377,000 Non Current Liabilities Gross Profit 179,000 193,000 10% Debentures 55.000 64,000 Current Liabilities Selling and Distribution Administration & Management Finance Costs 64,000 31.000 9.000 60.000 29,000 8.000 Bank Overdraft Trade Creditors Other Current Liabilities & Provisions 21.000 97.000 42.000 20.000 132.000 48.000 Total Expenses 104,000 97,000 Ratio Questions Total Owners Equity & Liabiliti 815.000 1.056,000 Non Current Assets at Book Values Land and Buildings Plant and Equipment Motor Vehicles 286,000 218.000 59.000 381,000 342.000 62.000 4pt Financial Consultants Current Assets Stock Trade Debtors Cash 122.000 124,000 6.000 97,000 166,000 8,000 Profit for the Period Taxation Profit After Tax Dividend Proposed Transfer to Revenue Reserve 75.000 22.300 32,500 24,000 28.500 96,000 28.800 67,200 37.000 30,200 Total Assets 815.000 1,056.000