Could you please help me to answer these questions! Thank you very much!

INTERPRETATION OF RATIOS AND RECOMMENDATIONS For James Traders Ltd ctors are concemed at the serious deterioration in both the eamings and financial company during the year ending 31/3/14 and have come to you for advice. condition of the During this period the Directors had extensively modernised their premises and had expected a significant improvement in their overall results as a consequence. ADDITIONAL INFORMATION Statistics of similar companies indicate the following Gross Profit averages 25% of sales. Net Profit before tax averages 6% of sales after allowing for selling Expenses at 10% of sales, Administration Expenses at 7% of sales, and Finance Expenses at 2% of sales, but before allowing for depreciation. Working Capital Ratios average 1.80:1 Quick Assets Ratio average 0.75:1 . Proprietorship Percentages average 50%. 60% of each years sales are credit sales. (This also applies to James Traders Ltd) The Bank is not worried that the bank account is in overdraft for the 2014 year. The directors have approached you, as their financial adviser, and asked you to prepare a detailed report to help them (i.e. not just a brief summary of main points) using: 1. the ratios and percentages 2. the Financial Statements 3. other additional information supplied You should try to make your solutions as realistic as possible, within reason. Do not invent unnecessary solutions. Make any reasonable assumptions you consider necessary, but state these in your answer Your answer will contain four parts under the headings Profitability, Financial Stability, Asset Utilisation and Recommendations. Under each of the first three parts (Profitability, Financial Stability, Asset Utilisation), discuss the significance of your observations and their possible causes. (Ensure that you provide recommendations only in the fourth part). In the Recommendations part, provide recommendations for improving current profitability and cash flows to acceptable levels. You should explain briefly the reason for each recommendation. Also, you must relate each recommendation to the findings you discussed before