Question 3:

The following draft financial statements for the year ended 30 September 2019 have been prepared from the book of CDP UK Limited.

Draft statement of profit or loss for the year ended 30 September 2019

Revenue 2,690,000

Cost of sales (1,860,000)

Gross profit 830,000

Distribution cost (150,000)

Administrative expenses (230,000)

Profit from operations 450,000

Finance cost (42,000)

Investment income 15,000

Profit before tax 423,000

Tax (53,410)

Profit after tax 369,590

Statement of financial position as at 30 September 2019

	000	000
Non-current assets		1,120,000
Current assets
Inventory	170,000
Trade debtors	110,000
Cash at bank	34,000	314,000
Total assets		1,434,000
Equity
Ordinary share Capital-1 each	380,000
Share Premium account	200,000
Retained earnings -at 31-8-2018	160,000
-Current Year	340,000
		1,080,000
Non-current liabilities
Borrowings		245,000
Current liabilities:
Trade creditors	80,000
Provisions	29,000	109,000
Total equity and liabilities		1,434,000

The current average for the industry in which CDP UK Ltd operates are as follows:

Ratios	Industry Average (2019)
Return on capital employed (%)	36.2
Gross profit percentage (%)	22.5
Operating profit percentage (%)	19.3
Asset turnover ratio (use capital employed) (times)	1.94
Quick/Acid ratio (times)	1.80
Debtors collection period (days)	15
Earning per shares (pence)	83
Interest cover (times)	6.7

Required:

1. Calculate each of the above ratios for CDP UK Ltd for the year ended 30 September 2019.

State clearly the formula used for each ratio and show ALL workings.