It should be Excel spreadsheet to demonstrate your Excel skills.

Scenario

Gaia Ltd is an established vehicle manufacturer operating across the UK and Europe. The directors of Gaia Ltd are considering expanding manufacturing of their new Electric Vehicle (EV), named the Gaia Niche, over the next 12 months.

PART A

The Directors of Gaia Ltd are considering expanding manufacturing of their new Electric Vehicle (EV), named the Gaia Niche, over the next 12 months. Gaia Ltd have asked you to calculate and compare ratios for 2019 and 2020 before making a recommendation as to whether to proceed with expansion plans or not.

Gaia Ltd Income Statements for the year ended
	31st Dec 2020		31st Dec 2019
Sales revenue		954,500,000			1,291,400,000
Cost of sales		(872,800,000)			(1,185,800,000)
Gross profit		81,700,000			105,600,000
Operating expenses		(82,300,000)			(88,809,000)
Operating profit		(600,000)			16,791,000
Finance charges (interest)		(1,220,000)			(1,644,000)
Profit before tax		(1,820,000)			15,147,000
Taxation		(418,000)			(3,000,000)
Profit for the year		(2,238,000)			12,147,000
Gaia Ltd Statement of Financial Position (Balance Sheet) as at
	31st Dec 2020		31st Dec 2019
Non-current assets		12,200,000			15,700,000
Current assets
Inventory (finished goods)	110,100,000			128,600,000
Trade receivables	4,800,000			4,770,000
Bank	0			7,000
Other current assets	47,504,000			124,523,000
		162,404,000			257,900,000
Total assets		174,604,000			273,600,000
Equity
Issued share capital	2,800,000			2,800,000
Reserves	9,500,000			32,600,000
		12,300,000			35,400,000
Current liabilities
Trade payables	52,300,000			78,700,000
Taxation	0			2,600,000
VAT and social securities	20,000,000			38,200,000
Other current liabilities	41,000,000			81,500,000
Bank overdraft	4,000			0
		113,304,000			201,000,000
Non-current liabilities
Loans	10,900,000			12,000,000
Pension Liabilities	38,100,000			25,200,000
		49,000,000			37,200,000
Total equity and liabilities		174,604,000			273,600,000

You are required to:

A. Use your Excel skills to calculate the following ratios for both years.

You should then present your calculated ratios within your reportin a simple table format for ease of comparison.

1. Gross profit margin
2. Operating profit margin
3. Return on capital employed
4. Asset turnover
5. Current ratio
6. Acid test
7. Inventory days
8. Trade receivable days
9. Trade payable days
10. Working capital cycle/operating cycle
11. Gearing
12. Interest cover

2. Compare the performance for both years in the 4 key areas of profitability, efficiency, liquidity and gearing using the ratios calculated in part 1 and make a recommendation as to whether Gaia Ltd should proceed with expanding manufacturing of their new EV, Gaia Niche.Marks will be awarded depending on the depth of discussion.