The following are the financial statements of Prospect plc for last year and this year:

l Return on net assets l Return on equity l Gross profit margin l Net profit margin l Stockholding period l Debtors collection period (days)
l Current ratio l Quick assets ratio l Gearing (debt to equity) ratio.
Use these ratios to comment on the performance and position of Prospect plc from the point of view of:

(a) a 10% owner of the equity; and

(b) the business’s bank.

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Profit and loss account for the year ended 31 December Turnover Cost of sales Gross profit Operating expenses Operating profit (before interest and taxation) Interest payable Profit before taxation Taxation Profit after taxation Dividend paid Retained profit for the year Retained profit brought forward from the previous year Retained profit carried forward Last year 000 14 006 This year 000 (7.496) 22 410 (11 618) (6 174) 4 618 _ (912) 6 510 10 792 (4 410) 2 100 (432) 1 668 (420) 1 248 (600) 3 706 (780) 2 926 (800) 2 126 648 722 1 370 1 370 3 496