Question 5 Edinburgh Ltd Summarised Income Statement for the year ended 31 December 2018 2017 000 000 000 000 6750 12825 Sales Less Cost of sales: Opening Inventory Purchases Less: Closing Inventory 360 675 4478 9450 450 -1350 4388 8775 4050 2362 Gross Profit Less: Expenses Profit from Operations 1890 3342 472 708 Edinburgh Ltd Summarised Statement of Financial Position as at 31 December 2017 2018 000 000 000 000 Non-Current Assets 3083 2835 Current Assets Inventory 450 1800 Trade Receivables 1688 7200 Cash and Bank 113 0 2251 6750 Total Assets 5334 9585 Non-Current liabilities Loan 0 113 Current Liabilities Trade Payables 360 1350 Bank overdraft 0 68 360 1418 360 1531 Equity & Reserves Ordinary Share Capital Retained Earnings 4051 5962 923 2092 4974 8054 5334 9585 Continued.... Required: a) Calculate the following ratios for both years i. Gross Profit Margin ii. Operating Profit Margin iii. Return on Capital Employed iv. Current Ratio V. Acid-test Ratio vi. Trade Receivables Collection (days) vii. Trade Payables payment (days) viji. Inventory Turnover (days) (16 Marks) b) Using the information from the calculations above, describe and evaluate the financial position and performance of Edinbrugh over the two-year period. (14 Marks) (Total 30 marks)