Answer to Question #186646 in Economics for Bornface Kandunda

Question

Christine Links is the chief executive of Links Builders. She is keen to compare the performance and liquidity of her company with that of another building company. She obtained a set of published accounts for Flash Builders plc and used ratios to help her in the comparison. These are the figures she used from both companies: Links Flash Capital Employed 200 400 Gross profit 100 150 Net profit 20 60 Sales turnover 350 600 Total Current assets 100 150 Stock 50 60 Total Current liabilities 45 120 2.1 Calculate two profitability ratios for both companies. (6) 2.2 Calculate the liquidity ratios for both businesses. (6) 2.3 Comment on your results in 2.1 and 2.2 (6

Answer 1

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