Use the information provided below to answer the following questions:

1.2.1 Calculate the return on net assets and current ratio for all three companies (expressed to two decimal places).

1.2.2 Comment on the return and risk associated with Company Z from your calculations in question 1.2.1

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INFORMATION Information pertaining to the working capital policies of three companies are reflected below: Company X Company Y Conservative Moderate R R 4 500 000 4 500 000 Sales Operating profit Current assets Current liabilities Non-current assets 540 000 3 600 000 1 350 000 2 700 000 540 000 3 000 000 1 650 000 2 700 000 Company Z Aggressive R 4 500 000 540 000 2 250 000 2 025 000 2 700 000 INFORMATION Information pertaining to the working capital policies of three companies are reflected below: Company X Company Y Conservative Moderate R R 4 500 000 4 500 000 Sales Operating profit Current assets Current liabilities Non-current assets 540 000 3 600 000 1 350 000 2 700 000 540 000 3 000 000 1 650 000 2 700 000 Company Z Aggressive R 4 500 000 540 000 2 250 000 2 025 000 2 700 000

Answer rating: 100% (QA)

1 Calculations Company X Return on net assets Operating profitT... View the full answer