PART 4: UNDERSTANDING THE FINANCIAL STATEMENTS OF BUSINESS CUSTOMERS (15 MARKS) Asked: Use the information from the ratios to complete the balance sheet and income statement for Pete Unlimited. You are provided with the following financial ratios of Pete Unlimited: Current ratio: Current assets Current liabilities = 1 Return on assets: Income before interest and tax 100 Total assets 1 = 37.00% Cost of sales ratio: Cost of sales 100 x Sales 1 = 80% Return on equity: Income beforetax 100 Equity 1 X = 66.00% = 5 times Sales Turnover ratio of total assets: Total assets Sales Turnover ratio of current assets: Current assets Cost of sales = 12.5 times Stock turnover: Inventory(stock) = 20 times 100 Capital ratio: Equity X Total assets = 50% 1 Balance sheet as at 28 February 20xx Shareholder Interest Ordinary share capital General reserves $ $ 800,000 Long term Liabilities Long term loan $ $ Current Liabilities Trade creditors Other short term loans $ $ 600,000 Total $ Fixed assets Vehicles and equipment $ Current assets Cash Debtors Inventory (stock) $ 150,000 $ $ Total $ $ Income statement for the year ended 28 February 20xx Sales (Turnover) Inventory (stock) beginning of year Plus Purchases Less Inventory (stock) end of year Cost of sales Gross Income Operating expenses Depreciation Net income before interest and taxation Interest payments Net income before taxation $ $ $7,900,000 $ $ $ $ $ 260,000 $ 740,000 $ $