Agro Co.'s income statement for the year ended 31 March 2019 and statements of

financial position at 31 March 2019 and 2018 were as follows:

Agro Co.: Income Statement for the year ended 31 March 2019

'000

Sales 3495

Cost of Sales (2182)

Gross profit 1313

Other income: interest received 33

Distribution costs (187)

Administrative expenses (309)

Interest costs (75)

Profit before tax 775

Income tax expense (157)

Profit for the year 618

Agro Co.:

Statements of Financial Position as at 31 March 2019 and 2018

2019 2018

'000 '000

Non-current assets

Property, plant and equipment (PPE) 1700 1615

Intangible assets 425 375

Investments 0 95

Current assets

Inventory 150 102

Trade receivables 1010 315

Short-term investments 75 0

Cash at Bank 452 1

Total Assets 3812 2503

Current liabilities

Trade payables 289 119

Bank overdraft 143 98

Taxation 312 285

744 502

Non-current liabilities

Long-term loans 170 50

Total Net Assets 2898 1951

Equity

Share capital (1 ordinary shares) 1950 1550

Share premium account 260 150

Revaluation surplus 70 51

Retained earnings 618 200

Total Equity 2898 1951

Required

a) Calculate for the financial year ended 31 March 2019 and, where possible, for

31 March 2018, the following ratios:

i) Gross profit margin

ii) Assets usage

iii) Current ratio

iv) Acid test

v) Inventories holding period

vi) Debt to Equity ratio

(12 Marks)

b) Critically explain the importance of considering the audience for financial

statement analysis. (13 Marks)