As a newly employed Accountant of Peace Limited, you have been presented the financial statement as follows:

Statement of Comprehensive Income for the year ended 31st December

	2017 E	2016 E
Net Turnover	456,500	420,000
Cost of Sales	(295 000)	(227 000)
Gross Profit	161,500	193,000
General, Admin and Selling Expenses	(109 500)	(93 000)
Operating profit	52,000	100,000
Debenture Interest Expenses	(14,500)	(3,000)
Investment Income	5.000	4.500
Profit before tax	42,500	101,500
Corporate Tax	(12,500)	(15,000)
Profit after tax	30,000	86 500
	149,500	89 500
Statement of income surplus
Balance b/f	30,000	86,500
Net Profit	179,500	176,000
Dividend: Preference Shares	(10,000)	(9,000)
Ordinary Shares	(12 000)	(17 500)
	157,500	149,500

Statement of Financial Position as at 31st December:

Assets	2017 E	2016 E
Goodwill	10,000	5,000
Tangible Fixed Assets	106,000	132,000
Inventories	147,000	118,500
Accounts Receivable	80,000	24,000
Bank and Cash on hand	26,000	28,500
	369,000	308,000
Liabilities:
Accounts Payable	37,500	26,500
Accruals	25,500	20,000
Debentures	58,500	37,000
Stated Capital
Preference Shares	40,000	25,000
Ordinary Shares	50,000	50,000
Income Surplus	157,500	149,500
	369,000	308,000

Required:-

a) Compute for the two years the following ratios:

1. Return on Capital Employed
2. Fixed Asset Turnover
3. Current ratio
4. Debt/Equity Ratio
5. Interest Cover

(b) Write a report to the Finance Director commenting on the financial performance of the company.