Based on the result of the previous year end and the industry average. Draft a report addressed to the Board of Directors of Stone Limited analysing the performance of the company for the year 2019

Profitability

ROCE = Operating Profit / Capital Employed * 100%

2019

9300

17800+76000 * 100% 9.91%

Net Profit Margin = Profit from operating profits/ Revenue * 100%

9300

224000 * 100% 4.15%

Gross profit Margin = Gross Profit / Revenue * 100% 2019 contd

54800

224000 * 100% 24.46%

Leverage

Gearing Ratio = debt/equity * 100%

17800

76000 * 100% 23.42%

Interest Cover = Profit from Operating Profit / Interest charged

9300

1900 4.89

Liquidity

Current Ratio = current Asset / current liability

39000

17800 2.19:1

Quick Ratio (Acid Test) = current asset inventory / current liability

39000 12800

17800 1.47:1