You have been presented with the following data related to two companies that are of the same size and operating in the same business sector: Co. A Co. B Data from The Income Statement $ millions $ millions REVENUE 3,800 3,300 OPERATING PROFIT 800 800 NET PROFIT AFTER TAX 500 350 NET INTEREST COST 60 250 DIVIDENDS FOR THE YEAR 2001 200 Co. A Co. B Data from The Balance Sheet TOTAL ASSETS $ millions $ millions 6,000 6,000 TOTAL CURRENT ASSETS 3,000 3,500 ALL INVENTORIES 1,000 1,500 ALL ACCOUNTS RECEIVABLE 1,000 1,500 | CASH & CASH EQUIVALENTS 1,000 500 TOTAL CURRENT LIABILITIES 2,500 4,000 TOTAL LIABILITIES 3,500 4,500 TOTAL EQUITY 2,500 1,500 TOTAL BORROWINGS 1,000 2,000 CONTINUE CONFIDENTIAL January 2024/BBA2234/Set A Compare the financial performance of the two companies above in the following areas, using the following ratios: Clues for the ratios are provided in brackets 1. Net Profit margin (NPAT/R) 2. Asset Utilisation Ratio (R/TA) 3. Net Return on Investment (NPAT/TA) 4. Cash Ratio (CCE/CL) 5. Current Ratio (CA/CL) 6. Accounts Receivable Ratio (AR/CL) 7. Gearing (TB/EQ) 8. Interest Cover (OP/Int) USE THIS TEMPLATE AS A GUIDE FOR YOUR ANSWER: PROFITABILITY 1 Net Profit Margin 2 Asset Utilisation Ratio 3 Net Return on Investment LIQUIDITY 1 Cash Ratio 2 Current Ratio 3 Accounts Receivable Ratio BORROWING MANAGEMENT 1 Gearing 2 Interest Cover The CO. A CO. B better ratio is for Company: (1mark for each ratio calculated correctly = 16*1 mark = 16 marks) (9 marks for correctly identifying which company performs better) [Total 25 marks]