Question 3 .

Zack Limited is manufacturing and selling electrical equipment. The business has been able to quickly establish its market in the past two years which was previously dominated by other suppliers. The business main emphasis is on customer relationship which has resulted steady increase in revenue of the business.

The owner of the business wants to assess business performance and position over the past two year using financial ratios.

The income statement and balance sheet of the business are as follows:

Zack Ltd. Income statement for the Years Ended 31 December:
				2013		2012
				000		000
	Sales			1200		800
	less: Cost of Sales			400		250
	Gross Profit			800		550
	Less: Operating Expenses			450		300
	Operating Profit			350		250
	less: Interest			50		25
	Profit after Interest			300		225
	less: Taxation			40		45
	Profit after Tax			260		180