4. George has prepared the following final accounts for the year ending 31 December 2013. Trading and Profit & Loss Account for the year ended 31 December 2013 $ $ 220,000 Sales Less: Cost of goods sold Stock at 1 January 2013 Add: Purchases 29,600 132,800 162,400 30,400 132.000 88,000 Less: Stock at 31 December 2013 Gross profit Less: Rent Salary Sundry expenses Net Profit 5,000 5,200 3.000 13,200 74,800 Balance Sheet at 31 December 2013 $ 153,800 74.800 228,600 42.400 186,200 34.800 221.000 $ Fixed assets at net book value Capital Premises 88,000 Bal b/f Vehicles 46,000 Add: Net profit 134,000 Current assets Less: Drawings Stock 30,400 Debtors 27,465 Current Liabilities Bank 29.135 Creditors 87.000 221.000 REQUIRED (a) Calculate the following ratios for George: (i) Gross profit as a percentage of sales (ii) Net Profit as a percentage of sales (iii) Rate of stock turnover (times) (iv) Return on average capital employed as a percentage (v) Current ratio (working capital ratio) (vi) Liquidity ratio (acid test ratio) (vii) Sales to average capital employed (viii) Average time that goods are carried in stock (months) (ix) Debtors' collection period in days (x) Creditors' settlement period in days Note: Workings must be shown (b) At 31 December 2012, George net profit margin was 38%. Suggest FIVE possible reasons for the decrease in the net profit margin from 2012 to 2013