Question Four: Saddam Ltd is considering the possibility of diversifying its operations and has identified three firms in the same industrial sector as potential takeover targets. The following information in respect of the companies has been exacted from their most recent financial statements. Ali Baba Camel Ratios 22.10 23.70 25.00 Return on Capital Employed before tax% Net Profit % 12.00 12.50 3.75 Asset turnover ratio 1.45 1.16 3.73 Gross profit % 20.00 25.00 10.00 Sales/Non-current Assets 4.80 2.20 11.60 Sales/Current Assets 2.10 5.20 5.50 Current Ratio 3.75 1.40 1.50 Acid test ratio 2.25 0.40 0.90 Average number of weeks' receivables outstanding! 5.60 6.00 4.80 Average number of weeks' inventory held 12.00 19.20 4.00 Ordinary dividend% 10.00 15.00 30.00 Dividend cover 4.30 5.00 1.00 Required: 1). prepare a report for the directors of Saddam Ltd, assessing the performance of the three companies from the information provided (profitability, liquidity and dividend). (15 marks) 2). Identify areas which you consider require further investigation before a final decision is made