Miss New Rich has decided to take advantage of the slump in the share market and has
Question:
Miss New Rich has decided to take advantage of the slump in the share market and has identified two listed companies, Rose plc and Daisy plc, for making her investment. She has obtained the financial statements of both companies, extracts from which are shown.
Further information provided:
You are required to assess the following aspects of each company, calculating the ratios identified:
(a) Profitability on the basis of:
(i) ROCE
(ii) ROE
(b) Liquidity on the basis of:
(i) Liquidity ratio
(ii) Cash flow ratio
(c) Operating efficiency on the basis of:
(i) Asset turnover
(ii) Inventory turnover
(d) Investment prospects on the basis of:
(i) Earnings per shares
(ii) Price earnings ratio.
Step by Step Answer:
Financial Accounting An Introduction
ISBN: 9780273737650
2nd Edition
Authors: Mr Barry Elliott, Mr Augustine Benedict