Amsterdam Ltd and Berlin Ltd are both engaged in retailing, but they seem to take a different
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Amsterdam Ltd and Berlin Ltd are both engaged in retailing, but they seem to take a different approach to it according to the following information:
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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 Required: Describe what this information indicates about the differences in approach between the two businesses. If one of them prides itself on personal service and one of them on com- petitive prices, which do you think is which and why?
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The information provided in the image shows various financial ratios for Amsterdam Ltd and Berlin Ltd We can analyze these ratios to understand the different approaches each company takes to retailing ...View the full answer
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Related Book For
Accounting And Finance For Non Specialists
ISBN: 9780273745884
7th Edition
Authors: Peter Atrill, Eddie Mclaney
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