a. Company XYZ took a loan in 2019, and the amount was AED 2000,000 with 6%, nearest, and the net Income before interest was AED 680,000 m 2020, tre comowy took another loan, and the amount was AED 2000,000 with 10% Interest, and the net income before interest was AED 300.000. Although the net income and in 2020, on equity (ROE) decreased compared to 2019. The number of shares has been the same for the two years. 

Required:

As a financial analyst, you have been asked by a client to explain why the ROE decreased in 2020 though the net income increased in the same you. Explain your answer

b-The following are the information on the operating cycle" and "days accounts payable outstanding for Company A. Company B and Company C.

The operating cycle for Company A is 50 days, and the days accounts payable outstanding is 30

The operating cycle for Company B a 70 days, and the days accounts payable outstanding is to 

The operating cycle for Company Cis 30 days, and the days accounts payable outstanding is 30 

Required:

Which company of the three companies has the most short term liquidity problem? Explain your answer.

Answer rating: 100% (QA)

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