Question 7:From the same information in the previous question (Question 6), calculate the following ratios for the business for both 2017 and 2018 separately, and at the end, briefly comment on the changes in the accounting ratios and the firm's financial position from 2017 to 2018:a) Gross profit as % of salesb) Inventory turnoverc) Rate of net profit on capital employed (use the sum of ending balances of the year for long-term liabilities and capital)d) Current ratioe) Acid test ratiof) Account receivable/sales ratiog) Account payable/purchases ratio Question is above, below in the image is the source to answer the question.

Question 6: (from chapter 39) The following information were extracted from the financial reports of M.Powell, a sole-trader. From the details below (Income Statement in 2018, and Balance Sheets in 2017 and 2018) you are to draft a statement of cash flow for M. Powell for the year ending 31 December 2018. M. Powell Income Statement for the year ending 31 December 2017 2018 f f Sales 116 900 140 800 Less Cost of goods sold Opening inventory 28 400 24 300 Add Purchases 75 000 95 000 Less Closing inventory 24 300 -79 100 -28 500 90 800 Gross Profit 37 800 50 000 Add Discounts received 400 500 Profit on sale of furniture 400 2 000 2 500 38 200 52 500 Less Expenses Electricity 1 100 1 500 Telephone 2 400 3 200 Salary 10 500 15 600 General Expenses 1 600 2 100 Bad debt 500 700 Increase in allowance for doubtful debt 100 200 Depreciation: Furniture 1 000 -17 200 1 000 -24 300 21 000 28 200 Statement of Financial Position as at 31 December 2017 2018 E E E E Non-current assets Furniture at cost 28 000 21 000 Less depreciation to date -8 000 -5 000 20 000 16 000 Current assets Inventory 24 300 28 500 Accounts receivable less allowance* 5 100 4 100 Bank 4 000 9 000 33 400 41 600 Total Assets 53 400 57 600 Current Liabilities Accounts payable 2 700 3 200 Non-current liabilities Loan from J. Abascus 7 000 4 000 Total liabilities -9 700 -7 200 Net assets 43 700 50 400 Capital Opening balance b/d 15 800 43 700 Add Net profit 21 000 28 200 Add Capital Introduced 6 900 Less Drawings -21 500 Total Capital 43 700 50 400 * Accounts receivable 2017 65,700 - allowance f600. Accounts receivable 2018 f4,900 - allowance E800. Note: Some furniture were sold for $5,000 during 2013. No new furniture was purchased during the year