ROR Ltd is an online business selling a variety of consumer products. At the end of 2021, its major shareholder instigated changes in management in order to improve performance. The financial statements for the years ending 30 June 2021 and 2022 are shown as follows.

INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2022 2021

$000 $000 Sales 9 000 8 125 Less: COGS 6 300 5 687 Gross profit 2 700 2 438 Less: Expenses:

Selling and administration 1 260 1 382 Interest charges 400 256 Profit before tax 1 040 800 Less: Tax 140 150 Net profit after tax 900 650 BALANCE SHEET AS AT 30 JUNE 2022 2021

$000 $000 Current assets Inventory 2 400 750 Accounts receivable 1 650 1 500 Total current assets 4 050 2 250 Noncurrent assets (at net book value)

Land and buildings 3 750 3 015 Machinery 1 200 1 010 Total assets 9 000 6 275 Current liabilities Bank overdraft 800 275 Accounts payable 1 700 600 Provision for employee entitlements 200 250 Total current liabilities 2 700 1 125 Noncurrent liabilities Bonds 3 950 2 000 Shareholders’ equity Share capital 1 000 1 000 Retained profits 1 350 2 150 Total shareholders’ equity 2 350 3 150 Total shareholders’ equity and liabilities 9 000 6 275 1 Calculate the following ratios:
a return on assets (using EBIT)
b asset turnover c profit margin d return on equity e current ratio f quick ratio g inventory turnover h days in inventory i debtors turnover j days in debtors k debt-to-equity ratio l interest coverage ratio.
2 Comment on the company’s performance, indicating any changes you would suggest.