Match Ltd and Box Ltd both began operations on 1 January 2020. For illustrative purposes, assume that at that date their statement of financial positions were identical and that their operations during 2020 were also identical. The only difference between the two companies is that they elected to use different accounting methods as can be seen below.

Summary financial information for both companies at the end of 2020 is presented below.

Required

(a) Calculate and interpret the following ratios for each company:
i. return on assets 

ii. return on ordinary equity 

iii. profit margin 

iv. current ratio 

v. receivables turnover 

vi. inventory turnover 

vii. debt ratio.

(b) Comment on the impact that use of different accounting methods can have on the calculation of ratios.

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Inventories Property, plant and equipment Match Ltd FIFO Straight-line depreciation Box Ltd Weighted average cost Diminishing-balance depreciation