7. Surendra Mohan & Sons are wholesale distributors of electric goods. Tables 25.38 and 25.39 contain their balance sheets and profit and loss statements. during the period 20X1 to 20X3. You are required to critically evaluate the firm's financial performance.

Table 25.38: Surendra Mohan & Sons Comparative Balance Sheets Liabilities and Capital R) 20X3 20X2 20X1 Creditors Accrued expenses Total current liabilities Owner's capital Total Assets Cash Debtors Stock Prepaid expenses Total current assets 65,994 62,229 55,065 2,645 1,920 1,168 56,233 68,639 64.149 2,08,812 1,81,341 1,63,394 2,77.451 2,45,490 2,19,627 19,550 14,376 9,542 86,784 61,601 40,217 61,661 63,167 68,086 2.667 1,70,662 1,40,577 863 1,18,708 99.285 97.878 96,229 7.504 7.035 4,690 1,433 Fixed assets Investments Total non-current assets Total 1,06,789 1,04,913 1,00,919 2.77,451 2,45,490 2,19,627 Table 25.39: Surendra Mohan & Sons Summarized Profit and Loss Statements R) 20X3 20X2 20X1 Sales 4,81,053 4,57,172 3,99,291 Cost of goods sold 3,10,720 2,75,514 2,29,878 Gross profit Operating expenses 1,41,377 1,70,333 1,81,658 1,69,413 1,37,984 1,20,593 Net profit 28.956 43,674 48,820