a) Using a selection of the ratios calculated in the calculations task, comment on the profitability of Carpetright Plc and discuss how the cash operating cycle can be improved to increase the profitability of Carpetright plc?

for ratio figure, please see the carpetright PLC 2019 report which is available online

Financial statements Consolidated income statement for the 52 weeks ended 27 April 2019 www.carpetright.plc.uk | 63 Group 52 weeks to 27 April 2019 Group 52 weeks to 28 April 2018 restated* Notes Underlying performance m Separately reported items m Total m Underlying performance m Separately reported items m Total m Revenue 2 386.4 386.4 446.3 446.3 Cost of sales (176.0) (176.0) (196.0) (196.0) Gross profit 2 210.4 210.4 250.3 250.3 Administration expenses (209.5) (9.2) (218.7) (245.6) (59.5) (305.1) Other operating income/(loss) 2.0 1.3 3.3 2.4 (2.3) 0.1 Operating profit/(loss) before depreciation and amortisation 2.9 (7.9) (5.0) 7.1 (61.8) (54.7) Depreciation 3 (10.7) (10.7) (11.0) (11.0) Amortisation 3 (0.7) (0.7) (1.3) (1.3) Operating loss 2,3 (8.5) (7.9) (16.4) (5.2) (61.8) (67.0) Finance costs 6 (8.4) (8.4) (2.8) (2.8) Loss before tax (16.9) (7.9) (24.8) (8.0) (61.8) (69.8) Tax 7 2.6 0.2 2.8 4.0 2.2 6.2 Loss for the financial period attributable to equity shareholders of the Company (14.3) (7.7) (22.0) (4.0) (59.6) (63.6) Basic loss per share (pence) 9 (5.1) (7.9) (5.8) (93.6) Diluted loss per share (pence) 9 (7.9) (93.6) Note: * The prior year was restated as a result of the adoption of IFRS 15 see note 33

Balance sheets as at 27 April 2019 www.carpetright.plc.uk | 65 Notes Group 2019 m Group 2018 restated m Company 2019 m Company 2018 restated m Group 2017 restated m Company 2017 restated m Assets Non-current assets Intangible assets 10 29.6 27.0 8.0 5.2 57.2 27.8 Property, plant and equipment 11 88.9 98.7 55.0 62.7 102.0 67.6 Investment property 12 10.3 10.5 1.4 1.4 15.3 2.3 Investment in subsidiary undertakings 13 15.7 15.7 15.7 Deferred tax assets 21 0.9 2.3 0.9 2.3 Trade and other receivables 15 0.5 0.7 0.4 0.7 0.4 0.4 Total non-current assets 130.2 139.2 81.4 85.7 177.2 113.8 Current assets Inventories 43.7 45.7 33.9 37.2 51.8 43.6 Trade and other receivables 15 12.9 16.7 50.0 55.5 17.4 56.8 Cash and cash equivalents 16 15.4 6.6 13.7 4.3 12.5 9.3 Total current assets 72.0 69.0 97.6 97.0 81.7 109.7 Total assets 202.2 208.2 179.0 182.7 258.9 223.5 Liabilities Current liabilities Trade and other payables 17 (69.8) (82.6) (65.9) (79.3) (98.8) (96.9) Obligations under finance leases 18 (0.1) (0.1) (0.1) (0.1) (0.1) (0.1) Borrowings and overdrafts 19 (25.5) (57.8) (25.5) (57.8) (20.1) (20.1) Provisions for liabilities and charges 20 (5.0) (10.6) (5.0) (10.6) Current tax liabilities (1.2) (0.8) (0.8) (0.8) (1.7) (1.7) Total current liabilities (101.6) (151.9) (97.3) (148.6) (120.7) (118.8) Non-current liabilities Trade and other payables 17 (24.3) (28.0) (24.3) (28.0) (34.5) (34.5) Obligations under finance leases 18 (1.3) (1.7) (0.3) (0.7) (2.1) (1.0) Borrowings and overdrafts 19 (15.9) (15.9) Provisions for liabilities and charges 20 (6.1) (9.1) (6.1) (9.1) (17.5) (17.5) Deferred tax liabilities 21 (2.7) (7.1) (3.8) (13.1) (7.8) Retirement benefit obligations 22 (0.6) (0.8) (0.6) (0.8) (3.2) (3.2) Total non-current liabilities (50.9) (46.7) (47.2) (42.4) (70.4) (64.0) Total liabilities (152.5) (198.6) (144.5) (191.0) (191.1) (182.8) Net assets/(liabilities) 49.7 9.6 34.5 (8.3) 67.8 40.7 Equity Share capital 24 3.0 0.7 3.0 0.7 0.7 0.7 Share premium 24 19.1 19.1 19.1 19.1 17.8 17.8 Treasury shares 24 (1.4) (1.4) (1.4) (1.4) (1.6) (1.6) Other reserves 29.0 (8.8) 13.8 (26.7) 50.9 23.8 Total equity attributable to equity shareholders of the Company 49.7 9.6 3