Accounting and Finance will send you fquestions file Essay - 1

Accounting and Finance will send you fquestions burden - Essay Examples that both the companies are competent in utilizing their capital and equity to capture equal profits despite the fact that Wimbledon has a higher proportion than Kensington. The Net Profit tolerance and Gross Profit ratio of Kensington are higher than that of Wimbledon. To make it worse, the ratios of Wimbledon are below the industry averages (Bull, 2008).The broad(a) assets turnover and non-current assets of Wimbledon is higher than that of Kensington. The ratio of Kensington was lower than the industrial averages. This implies that Wimbledon is good in utilizing its total assets and non-current assets to generate sufficient revenue. Apart from receivables collection period of Wimbledon being below the industrial averages, it is also below that of Kensington (Tennent, 2008). This shows that Wimbledon is very efficient in collecting its debts. The Inventory holding period follows the same trend as the rece ivables collection period. This reveals that Wimbledon is efficient in converting its inventory since it holds them for a short period (Berman, Knight and Case, 2013).The current ratio and decisive block out ratio of both the two companies are below the industrial averages. This is despite the fact the current ratio of the two companies are supra the one implying that both the two companies can at least receipts their current obligations with their current assets. The debt-equity of Wimbledon is below both that of Kensington and the industrial average implying that it is not heavily geared (Barrow and Barrow, 2008).Considering the above analysis, it is highly advisable that Chelsea Plc. should acquire Wimbledon than Kensington company since it has financial ratios indicate better financial performance. The directors of Chelsea Plc. should consider other(a) information such as cash flow statements and company policy forward of the two companies before making their final