Question 1. The financial results of Upsilon Ltd., a small retailing company, are as follows:

Income Statements for the year ended 31/12/XX	31/12/2019	31/12/2020
Sales	70,750	80,750
Cost of Goods Sold	-54,250	-59,250
Gross Profit	16,500	21,500
Operating expenses	-2,250	-2,750
Profit before interest and tax	14,250	18,750
Interest payable	-250	-450
Profit before taxation	14,000	18,300
Taxation	-3,450	-4,740
Profit after taxation	10,550	13,560
Statements of Financial Position as at 31/12/XX	31/12/2019	31/12/2020
ASSETS
Non-current assets	15,000	22,500
Current assets:
Inventories	5,000	5,500
Trade receivables	12,000	12,500
Cash	3,500	6,210
	35,500	46,710
EQUITY CAPITAL
Share capital	12,000	12,000
Retained profits	9,850	13,500
	21,850	25,500
LIABILITIES
Long-term loans	5,950	14,210
Creditors -liabilities:
Bank overdraft	3,200	1,000
Trade payables	4,500	6,000

Required: - 1.1 Using the data provided in the Income Statement and the Statement of Financial Position of Upsilon Ltd., calculate the following ratios for both 2019 AND 2020: - a) Return on Capital Employed ratio b) Current ratio c) Receivables collection period d) Payables payment period and e) Gearing Ratio 1.2 Using your results from 1.1, critically analyse the financial health of the organisation using each of above-stated five ratios. In your answer please state if each category of ratio has improved or deteriorated; reasons for the improvement or deterioration and the recommendations (if any) to the managers of Upsilon Ltd. for future improvement .