Following are the accounts for Drayton Ltd (Tables Al.1 and A1.2). Calculate the following ratios for Drayton for both 2001 and 2000:

• Return on shareholders’ investment (ROI).

• Return on capital employed (ROCE).

• Operating profit/sales.

• Sales growth.

• Gearing.

• Asset turnover.

Draw some conclusions from the change in the ratios over the two years.

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Table A1.1 Drayton Ltd Income Statement for the year ended 31 December In mill 2001 2000 Turnover 141.1 138.4 Net operating costs -113.9 -108.9 Operating profit 27.2 29.5 Non-operating income 1.4 1.3 Interest payable -7.5 -8.8 Profit before tax 21.1 22.0 Tax on profit -7.3 -5.7 Profit after tax 13.8 16.3 Dividends -8.0 -8.0 Retained profit 5.8 8.3