Question 2: Ground Ltdratio analysis Ground Ltd is in business as a frozen food Wholesaler. The accounts of the company for the past two years, as prepared for internal management, are set out below. Income statement for year ended 31 March 2018 2019 000 000 Sales 2,981 3,427 Cost of sales LE Am Gross prot 1,192 1,303 Wages and salaries 430 477 Distribution expenses 119 126 Advertising 45 9 Ofce expenses 49 47 Depreciation m m 796 830 Operating prot 396 473 Interest - 2 Prot before taxation 396 446 Taxation Prot for the nancial year i Q Dividends of 99,000 were paid during the year ended 31 March 2018 and 153,000 during the year ended 31 March 2019. Statements of financial position at 31 March 2018 2019 Non-current assets 1000 1000 1000 1000 Property (NBV) 1,800 1,710 Equipment (NBV) 270 405 Vehicles (NBV) 180 144 2,250 2,259 Current assets Inventory 374 500 Trade receivables 324 492 Cash in hand and at bank 110 43 808 1,035 Current liabilities Trade payables 347 218 Taxation payable 198 223 545 441 Net current assets 263 594 Non-current liabilities 10% 270 Debentures 2022 Net 2,513 2,583 assets Equity 2,160 Retained earnings 2160 353 423 2,513 2,583The managing director, who was previously a sales manager with a well-known public limited company, has asked for your advice concerning the points that follow: (3) She was led to understand that the debenture issue which took place in April 2018 would improve the cash balances of the company. She realises that some of the proceeds went towards buying new equipment but cannot understand where the rest of the proceeds have gone and is worried about the company's liquidity. (h) The investment in new equipment in April 2018 was part of a plan to increase the scale of operations by 25% in 2018/19. She had hoped that this would bring about a proportionate improvement in prot, but can see that this has not happened. There were no disposals of non-current assets during the year to 31 March 2019. Required: Calculate the following: 0 Protability ratios Liquidity ratios 0 Efficiency ratios Operating cash cycle Gearing ratios