A potential investor interested in purchasing shares in the company has approached you to undertake an analysis of the financial statements you have prepared in part 2 above.. As part of this analysis, you are required to:

a.Calculate the following ratios for both 2019 AND 2020. You are required to compare the results for the 2 years and also compare with the industry average.

b.

RATIOINDUSTRY AVERAGE

i.Return on equity8%

ii.Net profit margin7%

iii.Current ratio2:1

iv.Debt to total assets 35%

Average collection period 15 days

GENERAL LEDGER GENERAL LEDGER Name: Wage Expense Acc No: Name: GST Paid Acc No: Date Details Post. Ref . Debit Date Post. Jun 12 Sales Staff Detail Ref. Credit 47 $3,465 Date Details Post. Ref. Debit Date Details Post Jun 15 Office Staff 49 Jun 26 Sales Staff $13,905 Ref . Credit $3,465 Jun 23 Pooch $222.80 Parlour Jun 30 Sundry $13.50 Expense Name: Adversting Expense Acc No: Post. Date Details Ref. Post. Jun 21 50 Debit $1,080 Date Details Ref. Credit Name: Telephone Expense Acc No: Post. Date Detail Ref. Debit Jun 26 Date Post. 54 Details Ref. Credit $810 Name: Sale Return Acc No: Date Details Post. Ref. Debit Date Details Post. Jun 23 Ref. Pooch $2,228 Credit Name: Share Capital Parlour Acc No: Jun 30 Pet R Us $2,835 Date Details Post. Ref. Debit Date Details Post. Ref. Credit Jun 30 $18,000 31 32I GENERAL LEDGER Name: Sundry Expense Acc No: Date Details Post. Ref. Debit Date Details Post. 57 Ref. Jun 30 $135 Credit 33 34ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER Name: Cat Hotel Acct Code: 01 Name: Pooch Parlour Acct Code: Post. Explanation Post Date Ref. Debit Credit Balance Date Jun 1 Opening Balance Explanation Ref. Debit Credi $14,940 Balance 1 Sales Journal Jun 218 $8,11 $23,058 1 Opening Balance $20,655 223 $17,795.80 19 Sales Journal 222 $6,905.80 $29963.80 21 Sales Journal $38,450.80 9 Cash Receipt 121 126 $22,320 $7643.80 Cash Receipt $20,655 $17795.80 Journal Journal 28 Cash Receipt 129 $17795.80 SO Journa Name: Kettus Acct Code: Name: City Farmers Acct Code: Post. Post. Date Explanation Debit Credit Date Ref. Explanation Debit Balance Ref. Credit Balance Jun 1 Opening Balance Jun 1 Opening Balance $25,58 $12,825 Sales Journal 219 $20,938.50 $46520.50 27 Sales Journal 225 $10,741.50 23 Sales Journal 224 $4,653 $51173.50 6 $23,566.50 Cash Receipt 123 $12,568 $10,998.50 30 Sales Journal 227 $6,509 $57682.50 Journal Cash Receipt 124 $25,582 $32,100.50 Journal 14 Cash Receipt 127 $19,035 $13065.50 Journal Name: Pets R Us Acct Code: Post. Date Explanation Ref. Debit Credit Balance Name: Pets on Parade Acct Code: Jun 1 Opening Balance 28 Sales Journa $23,715 226 $19,651.50 $43366.50 Post. 2 Cash Receipt 122 $23,715 $19651.50 Date Explanation Ref. Debit Credit Balance Journal Jun 1 Opening Balance $17,257 13 Sales Journal 220 $12,919.50 $30,176.50 Name: 14 Sales Journal Pet City 221 $5,618.80 Acct Code: $35,795.30 8 Cash Receipt 125 $17,257 $18,538.30 Post. Journal Date Explanation Ref. Debit Credit 20 Cash Receipt Balance 128 $16,853 $1,685.30 Journal Jun 1 Opening Balance $7,538ACCOUNTS PAYABLE SUBSIDIARY LEDGER Name: World Of Pets Acct Code: J ACCOUNTS PAYABLE SUBSIDIARY LEDGER Post. Name: Pet Supplies Acct Code: Date Explanation Ref. Debit Credit Balance 1 Opening Balance $18,945 3 Purchase Journal WP004 $28,572.50 Post $9,627.50 Date 9 Explanation Ref . Debit Credi Balance Cash Payment 46 $18,945 $9627.50 Journal Jun 1 Opening Balance 16 Purchase Inventory PS1142 $27,630 $13,934.80 $41564.80 21 Purchase Inventory |PS1143 $16,830 $58394.80 1 Cash Payment 41 $27,630 $30,764.80 Journal Name: Glamour Pets Acct Code: Post. Date Explanation Ref. Debit Credit Balance Name: Dr Harry Acct Code: Jun 1 Opening Balance $35,077 9 Purchase Inventory GP147 $31,779 $66,856 25 Purchase Inventory GP148 Post. $20.146.50 $87002.50 Date Ref. Debit Credit Cash Payment 43 $35,077 Explanation $51,925.50 Balance Jun Journa 1|Opening Balance SS19,710 22 Purchase Inventory |DrH1112 $13,662 $33,372 3 Cash Payment 44 $8,460 $24,912 Journal 29 Cash Payment 56 $24,912 so Name: Doggy Delights Acct Code: Journal Post. Date Explanation Ref. Debit Credit Balance Jun 1 Opening Balance $22,117 Name: Better Pets & Gardens Acct Code: 16 Purchase Inventory DD2841 $34,303.50 $56,420.50 18 Purchase Inventory |DD2842 $8,563.50 $64,984 Post. Cash Payment 45 $22,117 $42,867 Date Explanation Ref. Debit Credit Journal Balance 23 |Cash Payment 53 $38,970 Jun 1 Opening Balance $25,426 $3,897 27 Purchase Inventory |BPGO003 $17,201.80 $42,627 Journal 14 Cash Purchase 48 $25,426 $17,201 JournalGENERAL LEDGER ACCOUNTS PAYABLE SUBSIDIARY LEDGER Name Account Receivable Acc No: Name: Pet Supplies Acct Code: Post. Date Details Post Ref. Debit Date 1 Details Ref. Credit Post. Cat Hotel | 218 $8,118 Jun 1 40 Date Explanation Ref. Debit Balance Fasta $180 Credit Jun 1 Opening Balance Courier $27,630 my 6 City 123 16 Purchase Inventory PS1142 $12,825 $13,934.80 $41564.80 21 Purchase Inventory PS1143 Farmer $16,830 $58394.80 Cash Payment Jun | 6 219 $20,938.50 41 $27,630 $30,764.80 VetAUS Jun Pooch 121 $20,655 Journal Parlour Jun 13 Pet on 220 $12,919.50 Jun 2 Pet R Us 122 $23,715 Parade 14 Pet on 221 $5,618.80 Parade Name: Dr Harry Acct Code: Jun 19 Cat Hotel 222 $6,905.80 Jun 7 VetAus, 124 $25,582 Jun 21 Pooch 3 $17,795.80 Jun Pet on 125 $17,257 Post Parlour Parade Date Explanation Ref. Debit Credit Balance Jun 23 VetAus 224 $4,653 Jun 9 Cat Hotel 126 $22,320 Jun 1 Opening Balance Jun 27 City 225 $10,741.50 Jun 14 VetAUS 127 $19,035 22 Purchase Inventory |DrH1112 $$19,710 $33,372 Farmers 3 $13,662 Cash Payment 44 $8,460 $24,912 Jun 30 Pets on 227 $6,509.80 Jun | 20 Pet on 128 $16,853 Journal Parade Parade 29 Cash Payment 56 $24,912 SO Jun 21 Journal Red 51 $113 Parcel Pooch $2,450.80 Parlour Jun 28 Pooch 129 $17,795.80 Name: Better Pets & Gardens Acct Code: Parlour Jun 30 |Pet R Us 226 $3,118.50 Post. Date Explanation Ref. Debit Credit Balance Jun 1 Opening Balance $25,426 Name: Inventory/Sale Acc No: 27 Purchase Inventory |BPGO003 $17,201.80 $42,627 14 Cash Purchase 48 $25,426 $17,201 Date Detail Post. Journal Ref. Debit Date Details Post. Ref. Credit Jun 1 Cat Hotel 218 $7,380 Jun 6 VetAus 219 $19,035 Jun 13 Pet or 220 $11,74 Parade Jun 14 Pet on $5,108 Parade Jun 19 Cat Hotel 222 $6,278 Jun 21 Pooch 223 $16,178 ParlourJun 27 City Farmers 225 $9,765 Jun 28 Pets R Us 226 $17,865 Jun 30 Pets on 227 $5,918 Parade GENERAL LEDGER Name: Account Payable Acc No: Name: Gst on sales Acc No: Date Details Post Ref. Debit Date Post. Post Jun 1 41 Details $27,630 Ref. Credit Date Details Ref. Debit Date Post. Pet Jun 3 World of WPOO4 Details Ref. Credit upplie Pets $9,627.20 Jun 30 Pets R Us 226 $283.50 Jun 1 Cat Hotel 218 $738 Jun Glamour 43 $35,077 Jun 9 Jun 2 Sales $1,154.20 Pets Glamour GP147 Pets $31,779 Jun 44 Revenue Dr Harry 58,460 Jun 16 Doggy DD2841 $34,303.50 Jun Delights VetAus 219 $1,903.50 Jun Doggy 45 $22,117 Jun 16 Delights Pet PS1142 $13,934.80 Jun Sal $1,434,70 World Of supplies Revenue Jun 46 $18,945 Jun 18 Doggy DD2842 $8,563.50 Jun 13 Pet or 220 $1,174.50 Pets 14 Delights Parade Jun Better 48 $25,426 Jun 21 Pet Pets $16,830 Jun 14 Pet on 221 $510.80 Jun 23 Doggy 53 $38,970 Supplies PS1143 Jun 22 Parade Dr Harry |DrH1112 Delights $13,662 Jun 16 Sale $963.80 Jun 28 Pets R 226 |$19,651.50 Jun 25 Glamour GP148 Revenue $20,146.50 Us Pets Jun 19 Cat Hotel 222 $627.80 Jun 29 Dr Harry 56 $24,912 Jun 27 Betters Jun 21 BPG0003 | $17,201.80 Pooch 223 $1,617.80 Pets Parlou Jun 23 VetAus 224 $423 Jun 23 Sale $668.20 Revenue Jun 27 City 225 $976.50 Farmers Jun 28 Pets R Us 226 $1,786.50 Jun 30 Pets On 227 $591.80 Parade Jun 30 Sale $1,127.50 Revenue Name: Discount Received Acc No: Post. Date Details Ref Debit Date Post. Details Ref. Credit Jun 1 Pet Supplies 41 $276.30 Jun Doggy 45 $442.34 Delights 25 26GENERAL LEDGER Name: Cash Acc No: Name Bad Debt Expense Acc No: Post. Date Detail Post. Ref. Jun 1 Debit Date Detail Post. Ref. Credit Date Details Ref. Jun 1 Easta Courier Debit Post. Pooch 121 Details $20,655 Parlour Jun 1 Date Ref. Credit Pet 41 $27,353.70 40 $180 Jun 2 Pet R Us 122 $23,715 Supplies Jun 21 Red Parcel 51 $113 Jun 1 Store 42 $1,633.50 Jun 2 Sales $12,696.20 Supplies Jun 2 Revenue Glamour 43 $35,077 Pets Jun City 123 $12,568.50 Jun armer Or Harry 44 $8,460 Jun VetAus 124 $25,582 Jun Doggy 45 $21,674.66 Jun 8 Pet on 125 $17,257 Delights Jun 9 Parade World of 46 $18,945 Name: Store Supplies Acc No: Jun 9 Cat Hotel | 126 Pets $22,320 Jun Wage 47 $3,465 expense Date Details Post Ref. 9 Debi Post Jun Sale $15,781.70 Date Details Ref. Jun 14 Better Pets Credit 48 $25,426 Jun 1 42 $1,485 Revenue Jun 14 VetAus 127 $19,035 Jun 15 Wage $13,905 Jun 16 Sales $10,601.80 Expense Jun Revenue 21 Advertising 50 $1,188 Jun 20 Pet on Expense 128 $16,853 Jun Parade Inventory 52 $6,361.30 Jun 23 Sales $7,350.20 Jun 23 Revenue Doggy 53 $38,970 Jun Pooch 129 |$17,795.80 Delights Jun Parlour Telephone 54 $810 Jun 30 Share Expense $18,000 Jun Capital Wage 55 $3,465 Jun 30 Sales $12,402.50 Jun 29 Expense Revenue Dr Harry 56 $24,912 Jun 30 Sundry 57 $148.50 Expense 27 28Name: Get On Purchase Acc No: Name: Inventory Acc No: Date Details Post. Ref. Debit Post. Date Post. Post. |1 Store 42 Details Ref. Credit $148.50 Date Details Ref. Jun 3 Debit Date Details Ref. Credit World of WP004 Supplies $8,752 Pets Jun 3 World of WP004 $875.20 Jun Glamour GP147 Pets $28,890 Jun 9 Glamour Pets GP147 $2,889 Jun 16 Doggy DD2841 Pets $31,185 Jun 16 DD2841 $3,118.5 Delights Doggy Jun 16 Pet PP1142 $12,668 Delights Jun 16 Pet Supplies PS1142 $1,266.80 Supplies Jun 18 Jun 18 Doggy DD2842 $778.50 Doggy D2842 $7,785 Delights Delights Jun 21 Jun 21 Advertising Pet PS1143 $15,300 50 $108 Supplies Expense Jun 22 52 Jun 21 Pet Supplies PS1143 $5,783 $1,530 Jun 22 Inventory 52 Jun 22 $578.30 Dr Harry DrH1112 $12,420 Jun 25 Jun 22 Dr Harry DrH1112 $1,242 Glamour GP148 $18,315 Jun 25 Glamour GP148 $1,831.50 Pets Jun 27 Better Pets BPGO003 |$15,638 Pets Jun 27 Better Pets BPGO003 |$1,563.80 Name: Discount Allowed Acc No: GENERAL LEDGER Post. Name: Date Details Ref. Sales Revenue Debit Acc No: Date Detail Post Jun 6 City Farmers 123 Credit $256.50 Date Details Post. Debit Date Details Post. Ref. Credit Jun 2 $11,542 Jun 9 $14,347 Jun 16 $9,638 Jun 21 $6,682 Jun 30 $11,275