Osprey plc is a family-owned clothes manufacturer. For a number of years the chairman and managing director was David Bird. During his period of office, sales revenue had grown steadily at a rate of 2 to 3 per cent each year. David Bird retired on 30 November 2011 and was succeeded by his son Simon Soon after taking office, Simon decided to expand the business. Within weeks he had successfully negotiated a five-year contract with a large clothes retailer to make a range of sports and leisurewear items. The contract will result in an additional 2m in sales revenue during each year of the contract. To fulfill the contract, Osprey Ltd acquired new equipment and premises. Financial information concerning the business is given below. Income statements for the year ended 30 November Revenue Operating profit Interest charges Profit before taxation Taxation Profit for the year 2011 2012 000 000 9.482 11,365 914 (22) 892 (358) 534 ******** 1,042 (51) 961 (386) 575 Statement of Financial Position 2011 2012 000 000 Non-current assets Property, plant and equipment (cost less depreciation) Premises 5,240 7,360 Plant and equipment 2.375 4.057 7.615 11.417 Current assets Inventories Trade receivables 2,386 3,420 4280 4.926 7.700 Total assets Equity 12.541 19.117 Share capital Reserves Non-current liabilities Benowing-loans 2,000 2,000 7.813 8.268 9.813 10.268 1.220 3.675 Current liabilities Trade payables 1.157 2.245 Taxation 179 193 Short-term borrowing (all bank overdraft) 172 2.736 1.508 5.174 Total equity and liabilities 12.541 19.117 Dividends of 120,000 were paid on ordinary shares in respect of each of the two years Required: (a) Calculate for Osprey Ltd, for both years the following ratios (to one place of decimals). i Operating profit margin ii. Net profit margin (after taxation) iii. Asset Turnover ratio iv. Return on capital employed v. Current ratio vi. Quick Assets ratio vii. Receivables Collection period vin Gearing ratio (debt to capital employed) (b) Using the above ratios, and any other ratios or information you consider relevant, comment on the results of the expansion programme