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QUESTION TWO Dink Ltd and Kil Ltd are both engaged in retailing, but they seem...

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QUESTION TWO Dink Ltd and Kil Ltd are both engaged in retailing, but they seem to take a different approach. One of them prides itself on personal service and the other on competitive prices. The following financial information relates to the two companies: Ratio Dink Ltd Kil Ltd Return on capital employed (ROCE) 25% 21% Return on equity (ROE) 35% 24% Average settlement period for receivables 62 days 21 days Average settlement period for payables 51 days 44 days Gross profit margin 40% 15% Net profit margin 10% Inventories turnover period 53 days 24 days 10% Required: a) Using the information above, analyse the performance of the two companies and indicate which one prides on personal service and the one which prides on competitive prices. (13marks) b) Identity different users of financial statements and state their respective interests. (12 marks)

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