Quantum Innovations has the following inventory and sales data:

• Beginning Inventory: £25,000
• Net Purchases: £85,000
• Ending Inventory: £15,000
• Sales Revenue: £150,000
• Operating Expenses: £40,000

Requirements:

1. Calculate the Cost of Goods Sold (COGS) and Gross Profit for the year.
2. Prepare an income statement for Quantum Innovations for the year ended 31 December 2021.
3. Calculate the inventory turnover ratio and discuss its impact on the company’s operations.