Cigalles Ltd. has carried on business for a number of years as a retailer of a wide variety of consumer products. The entity operates from a number of stores around the country. In recent years the entity has found it necessary to provide credit facilities to its customers in order to maintain growth in revenue. As a result of this decision the liability to its bankers has increased substantially. The statutory financial statements for the year ended 30 June 2016 have recently been published and extracts are provided below, together with comparative figures for the previous two years. STATEMENTS OF PROFIT OR LOSS FOR THE YEARS ENDED 30 JUNE 2015 2016 Em 2014 Em Sales revenue 1,850 (1.250) 2.200 (1,500) 700 2,500 (1.750) 750 Cost of sales Gross profit Other operating costs Operating profit Interest revenue from credit sales Profit before interest and tax Interest expense Profit before taxation Taxation Profit for the year 600 (550) 50 45 (640) 60 60 (700) 50 90 95 120 140 (25) 70 (110) 30 (60) 60 (20) 40 (10) 20 (23) STATEMENTS OF FINANCIAL POSITION AT 30 JUNE 2015 m 2014 2016 Em Em Property, plant and equipment Inventories 322 620 278 290 400 492 540 Trade receivables 550 633 12 1,182 15 1,590 Cash 12 Totai assets 1,392 Share capital Reserves Total aquity 90 282 372 90 292 382 90 282 372 Bank loans Other interest bearing borrowings 200 Trade payables yable Total liabilities and equity 520 200 270 20 320 610 320 280 270 20 1,182 1,392 1,590 Other information (a) Depreciation charged for the three years in question was: Year ended 30 June 2014 2015 2016 Em Em 70 Em 55 60 (b) The other interest bearing borrowings include 50m of 6% convertble loan stock. This stock is convertible into a total of 15 million ordinary shares in 2018. The repayment of the non-convertible interest bearing borrowings other than the convertible loan stock is due on 30 June 2020. (e) Dividends of 30m were paid in 2014 and 2015. A dividend of 20m has been proposcd. Issued capital consisted of 90 million ordinary shares at the nominal value of l at 1 July 2013, No shares have been issued or reacquired after that. (d) The bank loans are unsecured. The maximum lending facility the bank will provide is 630m. (e) Over the past three years the level of credit sales has been: Year ended 30 June 2014 2015 2016 Em Em Em 300 400 600 () The income tax rate is 33%. The entity offers extended credit terms for certain products to maintain market share in a highly competitive environment. Grven the steady increase in the level of bank loans which has taken place in recent years, the entity has recently written to its bankers to request an increase in the lending facility. The request was received by the bank on 15 October 2016, two weeks after the financial statements were published. The bank is concerned at the steep escalation in the level of the loans and has asked for a report on the financial performance of Cigalles Ltd. for the last three years. Required: 1. Calculate the following ratios for the three years (show the formulae and your workings): Gross profit margin and profit margin before interest and tax ROCE Operating costs to sales Inventory tumover Trade receivable days Interest cover Gearing Asset turnover