The financial statements of Anglo American Platinum Limited (Amplats) are presented in Appendix B following the financial statements for Eastern Platinum Limited (Eastplats) in Appendix A.

Instructions

(a) For each company, calculate or find the following ratios and values for the year ended December 31, 2010. Industry averages, where available, are shown in parentheses.

1. Working capital (n/a)

2. Current ratio (2.3:1)

3. Debt to total assets (23.7%)

4. Earnings per share (n/a)

5. Price-earnings ratio (the year-end share price for Eastplats was $1.77 and R664 for Amplats) (19.7 times)

(b) Based on your findings for question (a), discuss the relative liquidity, solvency, and profitability of the two companies and their industry.

(c) Would your findings in (b) change for Amplats if you used the financial statements it presented in U.S. dollars to calculate your ratios in (a) rather than those using the South African rand (R)?