Question 2 Alfredo Ltd is a sweet wholesaler, their last 2 years financial statements are summarised as follows: Income statement for the year ended 31st October 2019 2020 12,000 5,600 Turnover Cost of goods sold Gross profit Operating profit Profit for the period 6,400 20,000 8,000 12,000 4,800 3,600 3,200 2,400 ELECTRICE 2019 2020 3,000 9,600 2,000 4,000 2,000 16,000 800 6,000 4,400 20,800 Statement of financial position as at 31st October Net Non-current assets Current assets Closing Inventory Account receivables Bank Total assets Current liabilities Account payable Accruals Non-current liabilities 5% Long-term loan Equity 1 Ordinary Share Capital Total equity & liabilities 400 1,200 1,600 400 3,200 4,800 12,000 16,000 13,200 20,800 Required: a) Calculate the following ratios for 2019 and 2020: 1. Return on capital Employed (Operating profit) II. Gross profit % III. Net profit % (Operating profit) IV. Current ratio v Acid test/Quick ratio (15 marks) Tante round-off percentages, colculare times and pence to 1 decimal point b) Compare each of the above calculated ratio to briefly comment and identify areas of improvement. (15 marks) (Total 30 marks)