The financial statements of Anglo American Platinum Limited (Amplats) are presented in Appendix B, following the financial

Question:

The financial statements of Anglo American Platinum Limited (Amplats) are presented in Appendix B, following the financial statements for Eastern Platinum Limited (Eastplats) in Appendix A.

Instructions

(a) Calculate the following ratios for Amplats and East plats for 2010

1. Cash current debt coverage

2. Current ratio

3. Cash total debt coverage

4. Debt to total assets

5. Times interest earned

6. Free cash flow

(b) Compare the liquidity and solvency of each company from the ratios calculated in (a).

(c) Amplats uses the direct method of reporting operating activities while Eastplats uses the indirect method. Does this difference affect your comparison in (b)? Explain.

Financial Statements
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