Match Ltd and Box Ltd both began operations on 1 January 2017. For illustrative purposes, assume that at that date their statement of financial positions were identical and that their operations during 2017 were also identical. The only difference between the two companies is that they elected to use different accounting methods as can be seen below:

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

Summary financial information for both companies at the end of 2017 is presented below.

Statement of Profit or Loss for the year ended 31 December 2017
		Match Ltd			Box Ltd
	Revenue Less: Cost of sales	$	250 000 138 000		$	250 000 150 000
	GROSS PROFIT Other expenses*		112 000   43 000			100 000   53 000
	PROFIT	$	69 000		$	47 000

* Includes finance costs of $8000. Depreciation expense was $10 000 for Match Ltd and $20 000 for Box Ltd. Assume no income tax.

Statement of Financial Position as at 31 December 2017
		Match Ltd			Box Ltd
	Cash Receivables Inventories Property, plant and equipment (net)	$	20 000 50 000 52 000   55 000		$	20 000 50 000 40 000   45 000
		$	177 000		$	155 000
	Current liabilities Non-current liabilities Equity	$	30 000 45 000 102 000		$	30 000 45 000   80 000
		$	177 000		$	155 000

Required

A.   Calculate and interpret the following ratios for each company:

1.   Return on assets

2.   Return on ordinary equity

3.   Profit margin

4.   Current ratio

5.   Receivables turnover

6.   Inventory turnover

7.   Debt ratio.

B. Comment on the impact that use of different accounting methods can have on the calculation of ratios