SECTION C: Answer ALL questions George H. and James W. have identified two companies, Riccarton Plc and Edinburgh Plc they would be interested in investing. As they can only invest in one of the companies, they have asked you to provide them with an assessment of the performance of both companies based on the following ratios: Return on Capital Employed (ROCE), Current Ratio, Gearing Ratio and Price/Earnings (P/E) Ratio. The following information from the Statement of Financial Position (Balance Sheet) and the Income Statement (Profit and Loss Account) for both companies is available: Riccarton Plc '000 Non-current assets 500 Current assets 150 Long-term borrowings 180 Short-term borrowings 100 Non-current liabilities 250 Current liabilities 120 Equity 200 Profit before interest and tax 50 Earnings per share 35 pence Additional Information Current market value per share 195 pence Edinburgh Pic '000 350 80 100 50 150 70 130 45 28 pence 451 pence Required: (a) Calculate the following ratios: Return on Capital Employed (ROCE) Current Ratio Gearing Ratio Price/Earnings (P/E) Ratio 8 Marks (b) Based on the above ratios explain, which company George H. and James W. should invest in. You should also briefly discuss the limitations of your analysis. 7 Marks (Total 15 marks)