Last year This year

'000 '000

Income statement data

Revenue 5,000 5,250

Cost of sales 1,000 1,080

Gross profit 4,000 4,170

Selling expenses 800 980

Administration expenses 1,200 1,900

EBIT 2,000 1,290

Balance sheet data

Cash 200 220

Accounts receivable 350 360

Inventory 400 440

Fixed assets 18,600 24,660

Total assets 19,550 25,680

Required

a Using EBIT data, calculate EasternSunrise hotels ROI for each year to determine whether the hotels profitability is increasing or decreasing.

b Conduct further ratio analysis of the data provided to determine the main factors that lie behind EasternSunrises changed ROI level.