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QUESTION FOUR The following ratios have been calculated from the most recent financial statements for...

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QUESTION FOUR The following ratios have been calculated from the most recent financial statements for Goodman Enterprises and Kwiksave Limited. Both businesses operate in the retail industry Goodman Enterprises 55 days 39% Kwiksave Limited 22 days 13% Average collection period Gross profit margin Average days in inventory Net profit margin 46 days 23 days 9.9% 9.9% REQUIRED: (a) Compare and contrast the profitability and liquidity of Goodman Enterprises and Kwiksave Limited on the basis of the ratios above. (word limit: 300 words) (b) Explain which of the two businesses is likely to be operating in a price-competitive environment and to what extent this has impacted on their net profit margin: (word limit 150 words) PLEASE NOTE: A formula sheet of ratios is provided on the last page of this exam

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