The following information is given for Zena Paul:

Trading account for the year ended 30 November 20*8

Additional information

All purchases and sales are on credit.

The net profit margin for the year ended 30 November 20*7 was 29.48%.

The net current asset ratio at 30 November 20*7 was 2.78:1.

Required

Calculate the following ratios:

a) Gross profit margin
b) Net profit margin
c) Overheads in relation to turnover ratio
d) Return on capital employed
e) Rate of stock turnover
f) Net current asset ratio
g) Liquid capital ratio
h) Debtors’ collection period
i) Creditors’ payment period.

Comment on the results revealed by the net profit margin and net current asset ratio.

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Sales Less cost of sales Stock 1 December 20*7 Purchases Stock 30 November 20*8 Gross profit Balance sheet at 30 November 20*8 Fixed assets Current assets Stock Trade debtors Bank balance Current liabilities Trade creditors Capital Add profit Less drawings £ 14,000 98,000 112,000 16,000 16,000 19,000 3,000 38,000 15,000 £ 234,000 96,000 138,000 300,000 23,000 323,000 264,000 86,000 350,000 27,000 323,000