Q3. The following summary information from the final accounts of Florence has been provided at 31 May 2016: Sales 80,000 Cost of sales 45,000 Expenses 30,000 Drawings 4,000 Non-current assets (net book value) 28,000 Current assets 24,000 Current liabilities 12,000 Capital 40,000 Note: The inventory at 31 May 2016 was valued at 8,000. (a) Calculate the following ratios at 31 May 2016, to two decimal places: ) Gross profit to sales (ii) Net profit to sales (iii) Current ratio (iv) Acid test ratio (4 marks) (b) The following ratios were calculated for Florence at 31 May 2015: Gross profit to sales 51% Net profit to sales 13% Current ratio 1.5:1 Acid test ratio 1.0:1 Explain the change in liquidity over the period from 31 May 2015 to 31 May 2016. (3 marks) (c) Explain how Florence would be better able to manage her current assets and expenses if she monitored the stock turnover days of her business