The following statement of financial position was prepared for the business owned by Jack Hall at the end of its financial year. The business had credit sales of $224,000 and credit purchases of $154,000 for the year ended 31 December 2014.

Calculate the following ratios: 

a. Current ratio 

b. Liquid (acid test) ratio 

c. Return on capital employed 

d. Trade receivables turnover 

e. Trade payables turnover. 

In each case, state the formula used.

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Cost Depreciation Net book value Non-current assets 490 000 198 000 294 000 Current assets Inventory 17 000 Trade receivables 16 000 Other receivables 1 000 Cash and cash 2 000 36 000 equivalents Total assets 330 000 Capital Opening balance 298 000 Profit for the year 45 000 343 000 Drawings (37 000) 306 000 Current liabilities Bank loan 7 000 Trade payables 14 000 Other payables 3 000 24 000 Total capital and liabilities 330 000 %24 %24