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Question 2. The following data relates to two different companies, which sell similar products: Company...

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Question 2. The following data relates to two different companies, which sell similar products: Company A B 000 000 Sales (all on credit) 450 880 Cost of sales 370 Total expenses 140 220 Opening inventory 20 Closing inventory Closing receivables 35 55 Closing cash and bank Closing payables 40 220 40 50 30 20 30 60 Note - assume there are no other current assets or current liabilities. Required: a) Calculate TWO profitability ratios for both companies. [6 marks] b) Calculate THREE efficiency ratios for both companies. (8 marks] c) Calculate the current ratio for both companies. [3 marks] d) Calculate the acid test for both companies. [3 marks] e) Explain which of the two companies is the most successful using the ratios calculated. [10 marks]

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