Q No.2: On 1 October 2019 Manny Kyoor and his wife formed a limited company. Kyoor Ltd. to run a beautician's business and each paid in $37500 as share capital. The bank loaned the company a further $80000 at 9% interest per annum. At 30 September 2020 the business's final accounts were drawn up as follows. Trading and Profit and Loss Accounts for the year Ended 30 September 2020 Sales and fees $350000 Less; Cost of sales Stock bought on 1 October 2019 $31500 Purchases 280000 $311500 Stock at 30 September 2020 $66500 $245000 Gross Profit $105000 Less; Expenses Rent and Rates $3950 Advertising 1750 Wages 29000 Heat and Light 5250 Interest due 7200 Depreciation 12000 $59150 Net Profit $45850 NBV $124000 $36000 $160000 Balance Sheet as at 30 September 2020 Fixed Assets Cost Depreciation Premises $124000 Fixtures and Fittings $48000 $12000 $172000 $12000 Current Assets Stock $66500 Debtors $21500 $88000 Amounts to be settled within one year Creditors $21000 Interest due $7200 Bank $18950 $47150 $40850 $200850 Amount to be settled after more than one year Long term Loan $80000 $120850 Share capital and Reserves 75000 ordinary shares of $1 Retained Profit $75000 $45850 $120850 Industry average ratios and other relevant data concerning businesses similar to Kyoor Ltd were as follows. Gross Profit Margin 30.00% Net Profit Margin 18.07% Current Ratio 2.21:1 Liquid (Quick) Ratio 1.02:1 Stock Turnover Ratio 8 times Fixed Assets to Sales 50.18% Retum on Total Assets 25.37% Retum on Net Assets 34.93% Debtors' Payment Period 25 days (365 days) Creditors' Payment Period 30 days (365 days) a) Calculate each of the above ratios, to 2 decimal places, for Kyoor Ltd. Also calculate extended Du Pont ratio of Kyoor Lted. b) Comment on the businesses performance in the light of the data for the industry. c) Note. It is not sufficient to say that a ratio is 'higher' or 'lower' than an industry average- it must be made clear whether you think it is better or worse than the industry average and you must give reasons for your comments. a m