Your friend has $5,000 to invest in the share market and is deciding between investment in Big Ltd or Small Ltd. In the most recent reporting period, Big Ltd made a profit after tax of $1,000,000, compared to Small Ltd’s profit after tax of $500,000. Based on this information, your friend believes Big Ltd is the better investment. 

Required (200 words): 

a. As your friend has focused their investment decision only on one piece of information (profit after tax of the two companies for one specific reporting period), suggest other financial statement data, comparisons or methods of analysis that your friend could consider before deciding on an investment choice. (2 marks) 

b. Identify any non-financial data that may be of interest to help with your friend’s investment decision. 

Answer rating: 100% (QA)

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