Answer to Question #198716 in Management for Zee

Question

1.2 The following information has been extracted from the financial statements of Metco. Ltd and some related industries. Financial Ratio Description Metco. Ltd Industry Current Ratio 2.1 2 Acid Test Ratio 0.9 1.5 Debt Ratio 45% 30% Return on Equity R2/R1 R2.50/R1 1 Discuss how Metco. Ltd is doing financially compared to related industries and to acceptable norms for these ratios. (11)

Answer 1

Current ratio of Metco Ltd is more than Industryratio. This shows that the liquidity position of Metco Is better than Industry.