Heli Co is an international airline which flies to destinations all over the Asia. Heli Co experienced strong initial growth but in recent periods the company has been criticized for under-investing in its non-current assets. Total current liabilities 29,920 23,690 Total equity and liabilities 352,980 218,890 Extracts from Hell Co's financial statements are provided below. Statements of financial position as at 31 December: Other EXTRACTS from Hell Co's financial statements for the years ended 30 June: 2019 S'000 2018 $'000 Assets Non-current assets Property, plant and equipment Intangible assets (note ii) 2019 S'000 154,000 12,300 (9,200) 18,480 317,000 20,000 Revenue Profit from operations Finance costs Cash generated from operations 2018 $'000 159,000 18,600 (10,200) 24,310 174,000 16,000 337,000 190,000 The following information is also relevant: Current assets Inventories Trade and other receivables Cash and cash equivalents 580 6,100 9,300 490 6,300 22.100 Heli Co had exactly the same flight schedule in 2019 as in 2018, with the overall number of flights and destinations being the same in both years. Total current assets 15,980 28,890 In April 2018, Hell Co had to renegotiate its licenses with four major airports, which led to an Increase in the prices Hel Co had to pay for the right to operate flights there. The licenses with these major airports are due to expire in December 2020, and Hell Co is currently in negotiation with these airports Total assets 352,980 218,890 Required Equity and liabilities Equity Equity shares Retained earnings Revaluation surplus 3,000 44,100 145,000 3,000 41,800 Nil (a) Calculate the following ratios for the years ended 31 December 2018 and 2019: () Operating profit margin: () Return on capital employed; (1) Net asset turnover, (iv) Current ratio, (v) Interest cover, (V) Gearing (Debt/Equity) Total equity 192,100 44,800 Liabilities Non-current liabilities 66 loan notes Note: For calculation purposes, all loan notes should be treated as debt. 130,960 150,400 (b) Comment on the performance and position of Hell Co for the year ended 31 December 2019, Note: Your answer should highlight any issues which Hello should consider in the near future Current liabilities Trade and other payables 6% loan notes 10,480 19,440 4,250 19,440 2