Required:

Calculate the following ratios for both the companies:

1. ROCE

2. Gross Profit Margin

3. Operating Profit Margin

4. Current Ratio

5. Acid Test Ratio

6. Receivables Collection Period

7. Payables Payment Period

8. Inventory Turnover Period

9. Gearing Ratio

10. Interest Cover

Question 2 Both Ali plc and Basam plc operate wholesale electrical stores throughout the UK. The financial statements of each business for the year ended 30 June 2015 are as follows: INCOME STATEMENTS FOR THE YEAR ENDED 30 JUNE 2015 Ali plc Basam plc $'000 $'000 Sales Revenue 1,478 1,790 Cost of Sales 1,018 1,214 Gross Profit 460 576 Expenses 309 409 Operating Profit 151 167 Interest Payable 19 28 Profit before taxation 132 139 Taxation 32 35 Profit after taxation 100 104 STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2015 Ali plc Basam plc ASSETS $'000 $'000 Non Current Assets 447 601 Current Assets Inventories 592 403 Trade Receivables 176 322 Cash at Bank 85 92 Total Assets 1,300 1,418 Share Capital and Reserves 688 875 Non Current Liabilities 10% Loan Notes 190 Current Liabilities Trade Payables 406 276 Other Payables 16 17 Total Capital and Liabilities 1,300 1,418 250 Required