Jupiter Services has produced some financial ratios for the past two years. Use the ratios that have already been calculated to draw some conclusions about Jupiter's:

• Profitability

• Liquidity

• Gearing

• Efficiency.

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Return on (shareholders') investment (ROI) net profit after tax shareholders' funds Return on capital employed (ROCE) net profit before interest and tax shareholders' funds + long-term debt Net profit/sales Previous year Current year 193.4 251.9 = 7.4% = 9.9% 2,610.1 2,547.0 367.3 394.7 = 8.4% = 9.7 2,610.1 +1,770 2,547 +1,537.7 net profit before interest and tax sales 367.3 1,681.6 = 21.8% 394.7 1,566.6 = 25.2% Working capital current assets current liabilities Gearing ratio long-term debt shareholders' funds + long-term debt 613.3 475.3 = 42.5% 43.6% 1,444 1,089.2 1,770 2,610.1+1,770 = 40.4% 1,537.7 2,547 + 1,537.7 = 37.6% Current year Previous year Interest cover profit before interest and tax 367.3. 394.7 = 2.28 = 3.27 interest payable 161.1 120.7 Debtors' collections debtors 414.7 353.8 = 90 82.4 average daily sales 1,681.6/365 4.607 1,566.6/365 4.292 Asset turnover sales total assets 1,681.6 5,304.5+ 613.3 = 28.4% 1,566.6 4,794.6+475.3 = 29.7%