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The financial statements of A limited and B Limited for the year ended 3 1 May 2 0 2 3 are presented below: Both companies

The financial statements of A limited and B Limited for the year ended 31 May 2023 are presented below: Both companies are wholesale of cleaning products Statement of Comprehensive Income A Limited B Limited Sales 2700000016000000 Cost of Sales 2000000010000000 Gross profit 70000006000000 Operating expenses 10000001000000 Operating profit 60000005000000 Interest expense 600000400000 Profit before Tax 54000004600000 Dividend 1000000700000 Profit after Tax 44000003900000 Statement of Financial Position Fixed Assets Buildings 300000150000 Equipment 100000100000400000250000 Current Assets Inventory 30000002400000 Debtors 30000002000000 Bank 2000000150000080000005900000 Total Assets 84000006150000 Equity and Liabilities Share Capital 200000100000 Retained Earnings 5800000400000060000004100000 Current Liabilities Creditors 2400000205000024000002050000 Total Equity and Liabilities 840000061500004 REQUIRED: Used the information above to calculate and evaluate the following ratios for both the companies and which you prefer. Where applicable, round off answers correctly to two decimal places): 2.1. Current ratio (3)2.2. Liquidity ratio (3)2.3. Debtors collection period (3)2.4. Creditors payment period (Use the cost of sales figure)(3)2.5. Stock turnover (3)2.6. Return on equity (ROCE)(3)2.7. Asset turnover (Total assets)(4)2.8. Which company would you prefer to invest in and give a reason (3)

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