2016 000 2017 000 ASSETS Non-Current Assets Property, plant and equipment 1,265 1,525 Current Assets Inventories Trade receivables Cash at bank Total Assets 250 105 380 2.000 400 145 115 2,185 EQUITY AND LIABILITIES Equity Owner's Share capital Profit for the year 945 155 1,025 175 Non-current Liabilities Borrowings - 10% loan notes 500 500 Current Liabilities Trade payables Other payables Total Equity and Liabilities 300 100 2,000 375 110 2,185 (a) Calculate the following ratios that would be helpful in assessing the performance of Ocean Water Limited. (5 marks for each ratio calculated for both years.) 1) Return On Capital Employed (ROCE) 2) Return On Shareholders' Funds (ROSF) 3) Gross Profit Margin 4) Operating Profit Margin 5) Current Ratio 6) Acid Test Ratio 7) Trade Receivables Settlement Period 8) Trade Payables Settlement Period NOTE: Use end-of-year values and calculate ratios for both 2016 and 2017 Assume that all purchases and sales are on credit. (40 Marks) (b) Using the ratios calculated in (a) comment on the business's performance from the viewpoint of a prospective investor of shares. 2016 000 2,600 (1,560) 1,040 2017 000 3,500 (2.350) 1,150 Sales Revenue Cost of Sales Gross Profit Operating Expenses Wages and Salaries Overheads Depreciation Operating Profit Before Interest and Tax Interest Profit After Interest and Before Tax Taxation Profit for the year (320) (260) (150) 310 (50) 260 (105) 155 (350) (200) (250) 350 (50) 300 (125) 175