Edwin Ltd operates supermarket chains across the sixteen (16) regions of Ghana. The firm has been in commercial operation for more than two decades, growing its operations through an effective supply chain and financial management. Below are the financial statements of Edwin Ltd:

Income statement for the year ended 31 December 2020 (with comparatives)

Revenue Cost of sales

GH00 0 38,790 (32,420 ))

2020 Total

GH000

43,050 (37,020

2019 Total

Gross profit

Distribution (1,727) costs

Administrative (2,882) expenses

Interest (352) payable

Profit/(loss) 1,069 before tax

Tax (expense) (776) /credit

Profit for the 293 period

Abridged statement of financial position as at 31 December 2020 (with comparatives)

6,030

6,370 (1,662)

(1,790) (315) 2,603 (1255) 1,348

2020 GH000 Non-current assets 11,775

Current assets:

Inventories 4,986

2019 GH000 14,080

5,445

6,525

26,050

8,798

9,100

8,152

26,050

Other current assets

Total assets

Share capital & reserves

Non-current liabilities:

Debenture loan

Current liabilities

Total equity and liabilities

4,044

20,805

8,896

5,800

6,109

20,805

Additional information

i) On 31 December 2020, there was litigation and claim amounting to GH2.05 million against the company by a supplier whose contract was terminated as part of the closure process. Its legal counsel has advised the company that it has a good defence against the claim. Accordingly, no provision has been made in respect of the potential liability in these financial statements.

ii) The following ratios have been computed based on the 2019 financial statements of Mawutor Ltd

Gross profit margin

Profit (before interest and tax) margin Return on equity

Return on capital employed Inventory turnover

Current ratio

Assets turnover

Debt/debt+equity ratio

Required:

16.42% 6.71% 15.32% 16.30% 5.95 1.47 2.17 50.84%

Write a report to the Board of Directors analysing the financial performance and position of Mawutor Ltd.