The outline statements of financial position of the Nantred Trading Co. Ltd were as shown below:

Additional information
The only other information available is that the revenue for the years ended 30 September 20X0
and 20X1 was £202,900 and £490,700, respectively, and that on 30 September 20W9 reserves were
£26,100.

Required
a. Calculate, for each of the two years, six suitable ratios to highlight the financial stability, liquidity and profitability of the company.
b. Comment on the situation revealed by the figures you have calculated in your answer to (a) above.

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Statements of financial position as at 30 September 20X0 £ 40,000 65,000 105,000 ASSETS Non-current assets Premises Plant and equipment Current assets Inventory Trade receivables Bank and cash Total assets EQUITY AND LIABILITIES Equity Equity share capital Retained earnings Total equity Non-current liabilities 7% debentures Total non-current liabilities Current liabilities Trade payables Current tax payable Total current liabilities Total liabilities Total equity and liabilities 31,200 19,700 15,600 66,500 171,500 100,000 36,200 136,200 23,900 11,400 35,300 35,300 171,500 20X1 £ 98,000 162,000 260,000 95,300 30,700 26,500 152,500 412,500 200,000 43,600 243,600 100,000 100,000 55,800 13,100 68,900 168,900 412,500