Amsterdam Ltd and Berlin Ltd are both wholesalers serving broadly the same market, but they seem to take a different approach to it according to the following information:

Required:

Describe what this information indicates about the differences in approach between the two businesses. If one of them prides itself on customer service and one of them on competitive prices, which do you think is which and why?

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Ratio Return on capital employed (ROCE) Return on ordinary shareholders' funds (ROSF) Average settlement period for trade receivables Average settlement period for trade payables Gross profit margin Operating profit margin Average inventories turnover period Amsterdam Ltd 20% 30% 63 days 50 days 40% 10% 52 days Berlin Ltd 17% 18% 21 days 45 days 15% 10% 25 days