10.1 The chief executive officer of Sparkrite Lid, a trading business, has just received summary sets of financial statements for last year and this year. Income statements for years ended 30 September Last year This year 000 000 2000 1.800 000 1,920 Sales revenue Cost of sales Opening inventories Purchases 160 1.120 1.280 (200) 200 1,175 1,375 (250) Closing inventaries Gross profit Expenses Profit for the year (1.080 720 (680) - 40 94219 (1.125 795 (750) 45 Statements of financial position as at 30 September Last year 000 This year 000 950 930 ASSETS Non-current asseta Current asseta Inventories Trade receivables Cash at bank 200 375 4 579 org 1,529 250 480 2 732 1,682 Total assets EQUITY AND LIABILITIES Equity Fully paid E1 ordinary shares Retained earnings % 21| | 41| 825 509 1,334 195 1.529 883 554 1,437 225 1,842 Current abilities Total equity and abilities The chief financial afficer has expressed concern at the increase in inventories and trade receivables levels. Required: (a) Show, by using the data given, how you would calculate ratios that could be used to measure inventories and trade receivables levels during last year and this year. D) Discuss the ways in which the management of Sparkrite Ltd could exercise control over the levels of o inventories (i) trade receivables