Paragraph Instructions Notes Question 5 x Part A Shelzo Ltd, a manufacturer of construction equipment is considering the purchase of one of its suppliers, Raritron Enterprises. The purchase has been given preliminary approval by Shelzo's Board of Directors, and several discussions have taken place between the management of both companies. Raritron has submitted financial data for the past several years. Shelzo's controller has analysed Raritron's financial statements and prepared the following ratio analysis comparing Raritron's performance with the industry averages. Below is an extract of 3 ratios calculated. Raritron 21X2 Industry Average 21X3 21X3 21X1 Inventory turnover Accounts receivable turnover Current ratio 7.07 6.98 1.65 7.71 7.25 1.95 8.7 7.83 1.70 7.78 2.30 Required: Explain what the above ratias measure or indicate (do not explain how they are calculated) b What do these ratios indicate about Raritron Industries in comparison to the industry Answer to Part A Question 5 Part B Question 5 Instructions Notes 5 Paragraph BI U Part B Financial information for Ridge Ltd is as follows. 2019 Sales $1 500 000 Cost of sales 745 000 123 000 Selling expenses Administrative expenses Income tax expense 92 000 162 000 Profit 378 000 Required 1 2 Prepare a schedule showing a vertical analysis for 2019 Prepare a brief report outlining the results of your analysis for a potential investor Answer to Part B