The details given below are a summary of the statements of financial position of six public companies engaged in different industries:
The activities of each company are as follows:
1 Operator of a chain of retail supermarkets .
2 Sea ferry operator .
3 Property investor and house builder . Apart from supplying managers, including site management, for the house building side of its operations, this company completely subcontracts all building work.
4 A vertically integrated company in the food industry which owns farms, flour mills, bakeries and retail outlets.
5 Commercial bank with a network of branches .
6 Contractor in the civil engineering industry
Note: No company employs off statement of financial position financing such as leasing.
(a) State which of the above activities relate to which set of statement of financial position details, giving a brief summary of your reasoning in each case.
(b) What do you consider to be the major limitations of ratio analysis as a means of interpreting accounting information?
