Detailed below are the most recent accounts of Turkish Delight Ltd$.$

Income Statements for years ended $31$ March $20$x$220$x$1$

$\text{'}000\text{'}000$

Revenue $160,000153,000$

Cost of sales $(96,000)(97,920)$

Gross profit $64,00055,080$

Selling and distribution costs $(11,000)(10,000)$

Administrative expenses $(12,000)(7,000)$

Operating profit $41,00038,080$

Finance costs $(3,000)(2,800)$

Profit before Taxation $38,00035,280$

Tax $(7,600)(7,056)$

Profit for the year after tax $30,40028,224$

Statement of Financial Position on $31$ December $20$x$220$x$1$

Non$-$current assets $75,00068,000$

Current assets

Inventory $10,50010,900$

Trade receivables $19,60030,10017,20028,100$

Total assets $105,10096,100$

Trade payables $(3,000)(4,000)$

Bank overdrafts & loans $(5,500)(8,500)(5,250)(9,250)$

Non$-$current liabilities

Bank loans $(15,200)(35,850)$

Total liabilities $(23,700)(45,100)$

Net assets $81,40051,000$

Equity

Share capital $25,00025,000$

Retained earnings $56,40026,000$

Total equity $81,40051,000$

a$)$ Explain what each of the following categories of ratios tells the user of Financial

Statements:

$$ Profitability

$$ Liquidity

$$ Activity

$$ Gearing

$$ Investor

$(5$ Marks$)$

b$)$ Calculate the following ratios for each year:

$$ Profitability

$$ Liquidity

$$ Activity

$$ Gearing

c$)$ Using the ratios calculated in b$)$ report on the financial performance, efficiency and working capital management of the company.

d$)$ Identify and explain four potential benefits of budgets to an organisation.

e$)$ Critically discuss the use of traditional budgeting in modern organisations.