The summarised Balance Sheet and Profit and Loss Accounts of Norse pic at 31 December 1983 and 1984 are given below:

Balance sheet 1983 1984

£000 £000 £000 £000 Freehold premises at cost 90 90 Plant and equipment 120 160 Less accumulated depreciation 50 70 70 90 - - --

Stocks 45 48 Debtors 62 46 Cash 8 lIS 2 96 --- - -

275 276 Ordinary share capital Share premium Retained profits 10% Debenture stock Trade creditors Accrued expenses 100 20 32 60 50 13 275 100 20 40 60 47 9 276 /984 £000 154 109 45 17 10 Sales Cost of sales Gross profit Distribution expenses Administrative expenses 14 8 Profit and Loss Account 1983 £000 135 90 45 22 23 6 17 6 II 21 32 Operating profit Interest payable Ordinary dividend paid Retained profits blf Retained profits clf 27 18 6 12 4 8 32 40

(a) From the information provided calculate the following ratios for 1984:
Current ratio Acid test Stock turnover Debtors' turnover Sales to fixed assets Gross profit margin Return on total assets Return on shareholders' funds

(b) Explain the significance of each of the ratios calculated in part

(a) .