Question 3 (25 marks) The following balances have been extracted from the Income Statement for the year ending 31 December and the Statement of Financial Position as at 31 December for a clothes manufacturer Genesis Ltd: 2018 2019 m m Revenue 8.0 9.5 Operating profit (2.0) 1.9 Interest payable (2.4) 1.5 Profit before taxation (4.4) 0.4 Non-current assets net book value 11.9 10 Inventories 3.5 3.8 Trade receivables 2.6 4.1 Current assets 6.1 7.9 Ordinary share capital 1.0 1.0 Reserves 3.0 3.4 Borrowings - loan (repayable in 2024) 8.2 7.4 Trade payables 1.7 1.9 Bank overdraft 4.1 4.2 Current liabilities 5.8 6.1 Required a) Calculate for each year, the following ratios for Genesis Ltd: i. Return on capital employed ratio ii. Acid test ratio iii. Trade receivables settlement period ratio (in months) iv. Interest cover ratio V. Gearing ratio (use capital employed in the denominator) (10 marks) Question 3 continued overleaf, PTO Page 4 of 6