Question

Cooldown Ltd manufacture air conditioning units for sale to retailers. It is considering
converting to a Public Limited Company (PLC). Below are some key performance
indicators for Cooldown Ltd and the air conditioning manufacturing industry.
40
3-year comparison
Cooldown Ltd Industry
Year
1 2. 3 1 2 3
Gross profit margin %
40 42 45 36
40
Profit margin %
15 19 18 12 15
20
Return on capital employed (ROCE) % 15 20 16 12 14 16
Current ratio
1.4 1.6 1.2 1.2 1.1 1.1
Acid test ratio
0.6 1.0 0.8 0.7 0.9 0.9
a Define "acid test ratio".
b Identify two potential users of Cooldown Ltd's accounts.
c Give two possible reasons why Cooldown Ltd might want to convert
to a PLC. I
d Outline whý a new investor might use Cooldown Ltd's accounts.
e Consider whether a new investor should buy shares in Cooldown Ltd if it
converted to a PLC. Justify your answer.
[2
[2
[4
[6
[6

Answer 1

Answer:

do re mi pa so la te do ✨❤️