Is there a specific structure needed for answering a 'compare question?'
In the Catholic Trial, q23 b) 2 marks
Compare the liquidity of Darla's Discount to the industry average.?
The industry average was 2:1
Darla's liqudity was 1.18:1
I said :
Liquidity is the ability of the business to meet its short term financial obligations.
Darla's business is below the industrys liquidity average by .82. This presents risk of not covering current debt, therefore needing to increase current assets or decrease current liabilities.
In the Catholic Trial, q23 b) 2 marks
Compare the liquidity of Darla's Discount to the industry average.?
The industry average was 2:1
Darla's liqudity was 1.18:1
I said :
Liquidity is the ability of the business to meet its short term financial obligations.
Darla's business is below the industrys liquidity average by .82. This presents risk of not covering current debt, therefore needing to increase current assets or decrease current liabilities.