Reference no: EM133034120

Problem - Selected information for two companies competing in the catering industry is presented in the table below:

Account Name	Lawson	Dawson
Current assets	$110500	$167900
Non-current assets	$250000	$299000
Current Liabilities	$58600	$23500
Non-current Liabilities	$89700	$145000
Equity	$212200	$298400
Profit	$75000	$53000

Required -

A. Calculate the following ratios for Lawson and Dawson:

i. Current ratio

ii. Return on Assets (ROA)

iii. Return on Equity (ROE)

B. From your calculations in part (A), explain which amity is in a more favourable position.

C. Discuss two limitations of ratio analysis as a fundamental analysis tool.