QUESTION 3 [19 Marks] Gogo Ltd and Bobo Ltd are both wholesale companies working in...
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QUESTION 3 [19 Marks] Gogo Ltd and Bobo Ltd are both wholesale companies working in the same business segment. Given the information embedded in a number of ratios that we collected (see table below), they seem however, to take a different customer approach to their business. Ratio Gogo Ltd Bobo Ltd 14% 15% 59 days 50 days 19 days 47 days Return on capital employed Credit given Credit obtained Gross operating margin Current ratio Net operating margin Days inventory outstanding 42% 17% 2.4 1.3 11% 11% 50 days 21 days Required: Explain what the ratios reveal with regard to the operating approach of Gogo Ltd and Bobo Ltd. Take into account price competitiveness and customer service level
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