You are given below, in draft form, the financial statements of Algernon Ltd for 20X8 and 20X9. They are not in publishable format.

Required
a. Calculate for Algernon Ltd, for 20X8 and 20X9, the following ratios:
i. Return on capital employed;
ii. Return on owners’ equity (return on shareholders’ funds);
iii. Trade receivables turnover;
iv. Trade payables turnover;
v. Current ratio;
vi. Quick assets (acid test) ratio;
vii. Gross profit percentage;
viii. Net profit percentage;
ix. Dividend cover;
x. Gearing ratio.
xi. Using the summarized financial statements given, and the ratios you have just prepared, comment on the position, progress and direction of Algernon Ltd.

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ASSETS Plant Building Financial assets Land Inventory Trade receivables Bank Total assets Revaluation reserve Retained earnings Statements of financial position 20X8 Depn £ 10% debentures Trade payables Bank Cost £ EQUITY AND LIABILITIES Equity shares £1 each Share premium 10,000 50,000 60,000 4,000 10,000 14,000 Net £ 40,000 12,000 6,000 11,000 5,000 40,000 90,000 11,000 46,000 101,000 16,000 50,000 43,000 55,000 40,000 3,000 237,000 45,000 100,000 40,000 Cost £ 237,000 20X9 Depn £ Net £ 6,000 79,000 85,000 80,000 63,000 65,000 50,000 343,000 50,000 14,000 20,000 45,000 150,000 60,000 4,000 343,000