Sustaining Organisational Performance
) Calculate the following six ratios for both companies, clearly showing the ratio
formula and figures used: –
(i) Current ratio
(ii) Quick ratio (acid test ratio)
(iii) Receivables collection period
(iv) Return on capital employed
(v) Gross profit percentage
(vi) Net profit percentage
(b) Using the ratios calculated in part (a) prepare a report for the investor providing
comments on the performance and position of Wallace and Gromit.
(c) Suggest what further information might be useful to the potential investor
before they decide in which company to invest.
(d) It has been rumoured that Gromit is planning an expansion of their production
facilities which will cost £2.5million. Discuss how this might be financed and
any problems associated with the methods you have chosen.