Paul and Sons Ltd company senior management have been presented with thefollowing financial statement:

Paul and Sons Ltd

Income statement for the year ended 31st December

	2020		2021
	000	000	000	000
Sales revenue		4,600		4,840
Cost of sales
Opening inventories	250		300
Purchases	1400		2,450
	1,650		2,750
Closing inventories	(500)	(1,150)	(500)	(2,250)
Gross profit		3,450		2,590
Expenses		(1,250)		(510)
Operating Profit		2,200		2080
Interest payable		(30)		(40)
Profit before tax		2170		2040
Taxation		70		40
Profit for the year		2100		2000

Statement of financial position as of 31st December

	2020	2021
	000	000
ASSETS
Non-current assets
Machinery, vehicles and property	3,400	2,900
Current assets
Inventories	500	600
Trade receivables	800	850
Cash at bank	10	7
	1,310	1457
Total assets	4,710	4,357
EQUITY AND LIABILITIES
Equity
1 ordinary shares	2,757	2,820
Current liabilities Trade payables	410	329
	410	329
Non-current Liabilities
Long-term borrowings	1,543	1,208
Total equity and liabilities	4,710	4,357

Note: All sales and purchases were on credit.

a) Using six ratios we have learned, comment on the profitability (three ratios) and efficiency(three ratios) of the business.

Six ratios that are to be discussed are : 1)Gross profit margin 2)operating profit margin 3)return on capital employed 4)Average inventories turnover period 5)Average settlement period for trade receivables 6)average settlement period for trade payables