The financial statements for Harridges Ltd are given below for the two years ended 30 June 2017 and 2018. Harridges Limited operates a department store in the centre of a small town.

Dividends were paid on ordinary shares of £65,000 and £75,000 for 2017 and 2018, respectively.

Required:

(a) Choose and calculate eight ratios that would be helpful in assessing the performance of Harridges Ltd. Use end-of-year values and calculate ratios for both 2017 and 2018.

(b) Using the ratios calculated in (a) and any others you consider helpful, comment on the business’s performance from the viewpoint of a prospective purchaser of a majority of shares.

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Income statements for the years ended 30 June 2017 £000 2,600 (1,560) 1,040 Sales revenue Cost of sales Gross profit Wages and salaries Overheads Depreciation Operating profit Interest payable Profit before taxation Taxation Profit for the year (320) (260) (150) 310 (50) 260 (105) 155 2018 £000 3,500 (2,350) 1,150 (350) (200) (250) 350 (50) 300 (125) 175