14.8A Shirley has been thinking for a while about investing some surplus cash in an unlisted company that organises lettings of holiday properties in France. The company is run by an old friend of hers who is looking for additional investors in order to fund a planned expansion of the business.

Shirley has received financial statements for the business for 20X6 and 20X5. The profit and loss accounts and extracts from the balance sheets are as follows:

20X6 20X5

£000

£000 Sales revenue 976.9 899.6 Gross profit 377.6 360.9 Various expenses

(102.5)

(98.6)

Operating profit 275.1 262.3 Interest payable

(18.7)

(16.5)

Profit on ordinary activities before taxation 256.4 245.8 Taxation

(77.0)

(74.0)

Retained profit 179.4 171.8 Share capital 80.0 80.0 Reserves 1 465.0 1 285.6 Long-term loan capital 319.0 276.0 Calculate (to one decimal place) the following financial ratios for Shirley:

i) gross profit margin ii) operating profit margin iii) return on shareholders' funds iv) return on total capital employed.
Comment on any apparent changes in business performance between 20X5 and 20X6.