1.State two advantages and two disadvantages of ratio analysis.

2.In the statement of financial position, there is only one type of share - ordinary share. State and explain different types of shares.

On 1 October 2020, Lenny and his wife formed a limited company, Lenny Ltd, to run a beautician's business. They put in inventory value $31,500 and cash $43,500 in exchange for share capital. The bank loaned the company further $80,000 at 9% interest per annum. At 30 September 2021, the business's financial statements were drawn up as follows: Income Statement for the year ended 30 September 2021 Revenue 350.000 Less: Cost of sales Inventory 1 October 2020 31.500 Purchases 280,000 Inventory 30 September 2021 (66,500) (245,000) Gross Prolit 105.000 Less: expenses Rent und rules 3,950 Advertising 1.750 Wages 29,000 Heat and light 5.250 Interest due 7,200 Depreciation 12,000 (59,150) Profit for the year 45,850 Statement of Financial Position as at 30 September 2021 Cost Depreciation NBV Non-Current Assets Premises 124,000 124.000 Fixture and Fittings 48.000 (12,000) 36,000 172,000 (12.000) 160,000 Current Assets Inventory 66,500 Trade Receivables 21.500 88,000 Total Assets 248.000 Equity and Liabilities Ordinary shares 75,000 Retained Curnings 45,850 120,850 Non-current liabilities Long term loan 80,000 Current liabilities Trade payables 21,000 Interest due 7,200 Bank 18.950 47,150 Total Equity and Liabilities 248.000 Industry average ratius and other relevant duta concerning businesses similar to Lenny Lid were as follows: i 11. . iii. iv. V. vi. vii. Gruss margin 30.00% Profit margin 18.07% Current ratio 2.21:1 Liquid (acid test) ratio 1.02:1 Rate of inventory turnover ratio 8 times Trade receivables turnover 25 days Trade puyables turnover 30 days