3. From the following information you are required to

(a) analyze the relative position of ABC Ltd in the industry and

(b) point out the deficiencies and suggest improvements.

Table 25.34: ABC Ltd Profit and Loss for the year ended 31 December 20X1 () Sales 3,45,000 Cost of goods sold 1,50,000 Gross profit 1,95,000 Operating expenses 90,000 Profit before interest and taxes 1.05.000 Interest 24,000 Profit before taxes 81,000 Tax 27,000 Profit after taxes 54,000 Table 25.35: ABC Ltd Industry Averages Current ratio 2.95 Quick ratio 1.05 Debt-equity ratio 50% Times interest earned 2.60% Inventory turnover 0.35 Fixed-assets turnover 0.80 Total assets turnover 0.50 Net profit margin 16% Return on assets 15% Return on equity 21%