Comment on the trend of each of the four ratios

Reference no: EM132985761

Question: You have been provided with the following information for a private company, Edenrise Pty Lid, whose competitors are predominately large public companies.

2018 2019 2020 INDUSTRY AVERAGE 2020

Return on equity 13.1% 12.3% 10.2% 13.5%

Current ratio 1.8 1.9 2.2 2.0

Receivables turnover 12.2 12.6 13.0 13.0

Inventory turnover 4.7 4.5 4.2 4.8

REQUIRED: (a) Comment on the trend of each of the four ratios for Edenrise Pty Ltd in relation to the company's profitability and liquidity. For each ratio, describe what the ratio measures.

(b) Modern companies are required to focus on long-term sustainable profits driving the need to actively manage environmental and social issues.

Outline three possible activities that accountants could take to encourage their companies to discharge their environmental and social obligations.

Reference no: EM132985761

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