Cash Flow Statement and Ratios

The most recent financial statements of Lucky Star, a public company are shown below:

Statements of financial position as at 31December

	2020	2019
Assets	$'000	$'000	$'000	$'000
Non-current assets
Property, plant and equipment		22,000		12,500
Intangible assets		2,100		-
		24,100		12,500
Current assets
Inventory	6,400		4,400
Trade receivables	4,400		4,100
Bank	-	10,800	900	9,400
Total assets		34,900		21,900
Equity and liabilities
Equity
Equity shares of $1 each		10,000		7,000
Share premium		7,000		3,000
Retained earnings		10,100		5,500
		27,100		15,500
Non-current liabilities
8% loan notes		-		2,000
5% loan notes		3,000		-
Current liabilities
Bank overdraft	200		-
Trade payables	2,200		2,600
Current tax payable	2,400	4,800	1,800	4,400
Total equity and liabilities		34,900		21,900

Income statements for the year ended 31December:

	2020	2019
	$'000	$'000
Revenue	59,000	45,260
Cost of sales	(37,240)	(27,480)
Gross profit	21,760	17,780
Operating expenses	(6,040)	(3,700)
Administrative expenses	(4,300)	(3,180)
Finance costs	(350)	(180)
Profit before taxation	11,070	10,720
Income tax expense	(2,900)	(2,500)
Profit for the year	8,170	8,220

Additional notes:

1. Property, plant and equipment is broken down as follows:

	2020	2019
	$'000	$'000
Property	10,000	-
Plant and Equipment	12,000	12,500
	22,000	12,500

Apart from the property purchase, plant and equipment costing $3.6 million was purchased in the financial year ended 31December2020. There were no disposals of non-current assets. The property is not depreciated.

Required:

1. Prepare a statement of cash flows for Lucky Star Ltd for the year ended 31December2020, in accordance with IAS 7 Statement of cash flows, using the indirect method.

2. Calculate the following ratios for the ended 31December2020 and 2019.

• Gross profit margin
• Net profit margin
• Return on capital employed
• Quick ratio/ Acid test ratio
• Inventory turnover