Selected information for two companies competing in the catering industry have been presented below. Account A Ltd B Ltd Current assets $55250 $83950 Non-current assets $125000 $149500 Current Liabilities $29300 $11750 Non-current Liabilities $44850 $72500 Equity $106100 $149200 Profit $37500 $26500 Required: A. Calculate the following ratios for A Ltd and B Ltd: i. Current ratio. ii.Return on Assets (ROA). iii. return on equity (ROE). B. From your calculations part A, explain which entity is in a more favourable position.
Selected information for two companies competing in the catering industry have been presented below. Account A Ltd B Ltd Current assets $55250 $83950 Non-current assets $125000 $149500 Current Liabilities $29300 $11750 Non-current Liabilities $44850 $72500 Equity $106100 $149200 Profit $37500 $26500 Required: A. Calculate the following ratios for A Ltd and B Ltd: i. Current ratio. ii.Return on Assets (ROA). iii. return on equity (ROE). B. From your calculations part A, explain which entity is in a more favourable position.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Selected information for two companies competing in the catering industry have been presented below.
Account A Ltd B Ltd
Current assets $55250 $83950
Non-current assets $125000 $149500
Current Liabilities $29300 $11750
Non-current Liabilities $44850 $72500
Equity $106100 $149200
Profit $37500 $26500
Required:
A. Calculate the following ratios for A Ltd and B Ltd:
i.
ii.Return on Assets (ROA).
iii. return on equity (ROE).
B. From your calculations part A, explain which entity is in a more favourable position.
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