DHHT plc is a large chain of convenient stores. The financial statements for DHHT plc are given below. Non-current liabilities Long-term borrowings Current liabilities 28.000 28.000 4. Critically evaluate financial statements to assess or- ganisational performance using a range of measures and benchmarks to make justified conclusions. Income statement for the year ended 31 December 2020 $m. Trade payables 5,000 6,000 2019 Sm 90,000 Short-term borrowings 6,500 Revenue 6,000 100.000 11.500 12.000 Cost of sales 60,000 Total equity and End of document I 65,000 liabilities 84.500 87.000 Gross profit 30,000 35,000 3,000 Selling and distribution expenses Administrative expenses 3.200 5,300 5,000 Operating profit 21,700 26.800 Interest expense 1,900 400 21,300 Profit before taxation 24.900 1. Calculate and present the following ratios for the year 2020: a) Total assets turnover b) Average inventory turnover period c) Average settlement period for trade receivables d) Average settlement period for trade payables e) Net profit margin f) Gross profit margin g) ROA h) ROE i) Current ratio j) Quick ratio k) Debt-to-equity ratio 1) Interest cover ratio Income tax expense 4,280 4,980 Net profit 17.040 19.920 Statement of financial position as at 31 December 2020 $m. ASSETS Non-current assets 2019 Sm. Land and buildings 38,500 40.000 2. Using the ratios calculated in (1) and ratios below, com- pare the performance of DHHT plc between 2020 and 2019. Equipment 31.000 33.000 69.500 73,000 Current assets Inventories 5,000 5,500 Trade receivables 3,000 2,500 Cash 7.000 6,000 15.000 2019 1.14 28.30 10.00 28.00 18.93% 33.33% 21.50% 38.40% 1.17 0.71 0.60 54.25 Total assets turnover (times) Average inventory turnover period (days) Average settlement period for trade receivables (days) Average settlement period for trade payables (days) Net profit margin Gross profit margin ROA ROE Current ratio (times) Quick ratio (times) Debt-to-equity ratio (times) Interest cover ratio (times) Industry average 1.30 27.00 10.00 29.00 18.00% 32.00% 22.00% 40.00% 1.2 0.8 0.55 30 2018 1.12 28.00 9.80 26.50 18.50% 31.50% 20.80% 36.70% 1.1 0.6 0.57 56 14.000 Total assets 84.500 87.000 EQUITY AND LIABILITIES Equity Share capital 4,000 4,000 Additional paid-in capital 35,000 35,000 Retained earnings 6,000 8,000 3. Evaluate the performance of DHHT over time using fi- nancial ratios with reference to relevant benchmarks above. Total equity 45,000 47.000