You are financial adviser to a retailing company, Us Ltd. You obtain the accounts of its main competitor operating in the same market. Them Lbt, and extract the comparison shown below: Balance sheets as at 31 March 20x0 Us Ltd Them Ltd KOOO K000 K000 K000 K000 K000 Non-current assets Land and buildings 381 286 Fixtures and fittings 342 Vehicles 62 218 59 Current assets Inventory 96. Trade debtors 166 Cash 9 271 Current liabilities Overdraft 20 Trade creditors 132 Accruals 48 200 785 71 856 122 124 6 252 21 97 42 160 563 92 655 Shareholders' funds Share capital Capital reserves Income statement 10% debentures Income statement for the year ended 31 march 20x0 Them Ltd Sales(on credit) 470 350 35 65 287 185 792 600 Us Ltd 64 55 856 655 K000 K000 K000 k000 570 747 Cost of sales Opening inventory 92 102 Purchase (on credit) 381 588 473 690 Closing inventory | 96 122 377 568 Gross income 193 179 Distribution costs 60 Administration costs 29 64 31 89 95 104 84 Interest charge Net Income 8 9 96 75 Taxation 45 37 51 38 Dividend 37 24 Retained profit for the year 14 Upon analysis this information, you observe that it reveals significant differences between the companies. REQUIRED. a) Calculate and identify the key differences in profitability and in working capital management as between the two companies. b) based upon the analysis at(a)above, recommend actions which the management of us Ltd should consider in order to improve their financial performance. c) State any reservations you may have above drawing conclusions from the comparative analysis of the two companies. 14 You are financial adviser to a retailing company, Us Ltd. You obtain the accounts of its main competitor operating in the same market. Them Lbt, and extract the comparison shown below: Balance sheets as at 31 March 20x0 Us Ltd Them Ltd KOOO K000 K000 KOOO K000 K000 Non-current assets Land and buildings 381 Fixtures and fittings 342 Vehicles 62 286 218 59 Current assets Inventory 96 Trade debtors 166 Cash al Current liabilities 785 122 124 6 271 252 Overdraft 20 Trade creditors 132 Accruals 48 200 71 856 21 97 563 42 160 92 655 Shareholders' funds Share capital Capital reserves Income statement 10% debentures Income statement for the year ended 31 march 20x0 Them Ltd Sales(on credit) 470 350 35 65 287 185 792 600 Us Ltd 64 55 856 655 K000 K000 K000 k000 570 747 Cost of sales Opening inventory 92 102 Purchase (on credit) 381 588 473 690 Closing inventory 96 122 377 568 Gross income 193 179