I attached the paper below. Thank you

Exercise 1 The summarised annual financial statements for Eskdale Plc are given below for the year to 31 December 2017, and three years later for the year to 31 December 2020. The financial statements show that Return on Capital Employed stood at 10.8% in 2017 and 5.6% in 2020. By analysing the drivers of earnings based on the financial statement data provided, you should explain why profitability has declined and the key drivers which have caused this. The average tax rate for both years on financing activities is 27%. Eskdale Pic (E000) (000) 2020 2017 STATEMENT OF FINANCIAL POSITION Assets Cash and Short Term Investments 8,232 9,500 Receivables 34,972 21.225 Total Inventories 16,762 16,316 Other Current Assets 550 871 Current Assets - Total 60,516 47.912 82670 67,420 51,158 37,300 Property Plant and Equipment - Gross Accumulated Depreciation Property Plant and Equipment - Net Intangible Assets 31,512 30.120 8,612 7.516 Total Assets 100,640 85,548 19,431 14,072 Liabilities & Shareholders' Equity Accounts Payable Short-Term Debt and Current Portion of Long- Term Debt Accrued Payroll Income Taxes Payable 900 1,050 1,573 2,689 105 419 2,6311 1,767 24,640 19,997 14,700 10,015 Other Current Liabilities Current Liabilities - Total Long Term Debt Provisions and Other Liabilities Shareholders' Equity Total Liabilities & Shareholders' Equity 21,001 17,546 40,299 37.990 100,640 85.548 STATEMENT OF PROFIT AND LOSS Net Sales 95,006 86.416 Less: Cost of Goods Sold 66,112 62,954 19,431 14,072 900 1,050 Accounts Payable Short-Term Debt and Current Portion of long- Term Debt Accrued Payroll Income Taxes Payable Other Current Liabilities 1,573 2,689 105 419 2,631 1,767 Current Liabilities-Total 24,640 19,997 Long Term Debt 14,700 10,015 Provisions and Other Liabilities 21,001 17,546 Shareholders' Equity 40,299 37.990 Total Liabilities & Shareholders' Equity 100,640 85,548 STATEMENT OF PROFIT AND LOSS 95,006 86,416 66,112 62,954 9,412 5,520 19,482 17,942 15,181 11,661 Net Sales Less: Cost of Goods Sold Less: Depreciation and Amortization Gross Income Less: Selling, General & Administrative Expenses Operating Income Add: Interest Income Earnings before Interest and Taxation (EBIT) Less: Interest Expense Pretax Income 4,301 6,281 219 172 4,520 6,453 1.030 567 3,490 5,886 1,222 1,767 Less: Income Taxes Net Income 2,268 4,119 2016 2013 Return on Capital Employed 5.6% 10.8%