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QUESTION TWO [29] Extracts of the Stasement of Comprehensive hocome for the year eoded 31...

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QUESTION TWO [29] Extracts of the Stasement of Comprehensive hocome for the year eoded 31 Decenber 2021 and the Staternech of Financial Position as at 31 December 2021 are given below for two coeparies vet. Ash Limied and Burtion Limited Extract of Statement of Comprehensive income for the year ended 31 December 2021: Extract of Stasement of Financial Posicon as at 31 December 202t: Additional information: - Inventories as at 31 Decenber 2020 are as folows: Ash Limilied Rb00 000 Burton Limilied R230 000 - All sales and purchases of inventaries are on credit. Required: Compare the performance of Ash Limited and Burton Limited (both in same industry) with regard to the following ratios and in each case state your observations: 2.1 The ability of each company to repay its short term debts without relying on sale of its inventories. (5) 2.2 The return earned by shareholders on their investment. (5) 2.3 The operational effectiveness of each company before considering interest income, interest expense and income tax. (5) 2.4 The effectiveness with which the goods for sale have been managed. (3) 2.5 An evaluation of each company's performance with regard to the management of its trade creditors

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