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In: Accounting

Some of the key ratios for Palmerston plc and its main competitor Glebe plc are as...

Some of the key ratios for Palmerston plc and its main competitor Glebe plc are as follows.

Palmerston Glebe

Gearing 70% 10%

ROCE 25% 15%

Gross profit 40% 50%

Receivables’ collection 5 days 35 days

Payables’ payment 30 days 30 days

Explain why analysts might consider each of the ratios above to be useful. Use the ratios above to assess the financial performance and financial position of the two companies.

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