Question
Walter Ltd is a waffle manufacturing company. Trendy Solutions is a software development company. The ratios of Walter Ltd and Trendy Solutions Co. are as
Walter Ltd is a waffle manufacturing company. Trendy Solutions is a software development company. The ratios of Walter Ltd and Trendy Solutions Co. are as follows. Walter Ltd.
Trendy Solutions co. Profitability ratios Return on capital employed 25% 60% Operating profit margin 22% 40% Gearing ratio Debt-equity ratio 70% 35% Liquidity ratios Current ratio = times 2.50 4.00 Quick ratio = times 0.70 3.80 Activity ratios Asset turnover = times 2.50 3.80 REQUIRED: Compare and analyse the ratios of the two companies. Does it make a difference whether the company is a manufacturing company or a service company?
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