Question- Calculate the following ratios for each of the two years.

(i) Return on equity

(ii) Earnings per share

(iii) Operating profit % sales

(iv) Inventory holding period in days

(v) Quick or acid test ratio

Also write explanation for your answer please.

Income statements for the years ended 31" December in Emillions: Income Statements 2019 2020 Sales 100 110 Gross profit 40 43 Operating profit 15 17 Interest payable 5 9 Profit before tax 10 Taxation 3 2 Profit after tax 7 6 Dividends 6 6 Retained profit for the year 1 0 | Olaia N00 ch Statements of financial position as at 31 December in Emillions: 2019 145 2020 244 Statements of financial position Non-current assets at net book value Current assets: Inventory Receivables Total assets 9 IN 24 12 18 274 179 50p Ordinary shares Share premium Retained profits Shareholders' funds 60 0 48 108 48 158 Debentures 45 90 Current liabilities: Payables Bank overdraft Dividends Corporation tax Shareholders' funds and liabilities 12 5 6 owo UN 12 6 6 2 274 No 179