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Charlie And Lola Ratios Activities

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Charlie And Lola Ratios Activities
Charlie and Lola: Ratios Activity

Two of my friends have been having an argument about who owns the best business. They have asked me to judge which business is the best. I said that it depends upon what they mean by “the best” – do they mean which is the most profitable, or do they mean which one is the most stable (in other words, can meet its debts on time – always a difficulty for a small business)?

I don’t want to upset either friend, so I told them I would ask you to judge…..

Here are some extracts from their accounts

Task:

Criteria 1: Profitability (a) Working on your own, you should calculate the performance ratios for both businesses: i. Net profit margin ii. Gross profit margin iii. Expenses: sales
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