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Explain which entity is in a more favourable position

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Reference no: EM132566055

Question - 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 entity is in a more favourable position.

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

Reference no: EM132566055

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