2014 do before QUESTION SIX Salemead plc is a builders' supples company located in Luanshya and has sutered quite markedly from the effects of the recession. It is now seeking additional long term funds in order to safeguard its financial posbon and to help it to move into new markets. Its summarised francial Statements for the three years to 31 December 2016 are shown below Profit and Loss Account for the Year (K000s) 2015 2016 Sales 18,500 15,900 15.100 Cost of sales 10,552 8.537 7.970 Gross profil 7.948 7,363 7.130 Distribution costs 2.775 2,891 2.768 Administration costs 4.488 4,262 Operating profit 210 157 Interest 20 65 70 56 615 145 145 102 Corporation tax 203 18 Net proft after tax 312 127 102 Dividends 560 163 163 Transfer to reserves (248) (36) Balance sheet at 31 December 2014 2015 2016 Fixed assets Land and buildings 1,343 1,343 Equipment and 4205 386 2.726 200 3.373 motor vehicles 1441 1. 110 1,136 2,453 Current Assets Stocks 1,893 1,745 2.287 Debtors 3,159 3.213 3,168 Cash and bank balances 543 258 41 5,610 5.216 5,496 Less: Ourrent Liabilities Creditors 2,873 2.567 Taxation 200 10 Dividends 109 2.677 2,825 Net current assets 2.237 2.639 2,670 Total assets less current labies 5.028 4.992 4,931 Long term loans 800 800 800 4, 228 4. 192 4,131 Share capital (K1 shares) 2,400 2.400 2.400 Reserves 1.792 Shareholders' funds 4.192 Required Calculate such ratios as may be helpful in judging the performance of the company in toms of profitability, liquidity and efficiency over the three years to 31 December 2016 Present your interpretation of the company's results over the three years. (Total 25 marks) 1.731 131