The accountant has produced the following financial records for the 2020 and 2021 financial years to the commercial team for a construction contractor. I am part of a technical team that assists the commercial team with decisions on future prospects and the trajectory the contractor.

Can you assist with the following based upon these financial records -

1. Explain the role of financial ratios in the determination of the health of finances of a construction project-based organisation?

2. Using the financial books issued by the accountant, conduct a thorough determination of the financial health of the contractor?

Income statement (Profit & Loss) Revenue Operating costs Amortisation of acquired intangible assets Other operating income share of post-tax results of joint venture Operating profit/(loss) Finance income Finance costs Profit/(loss) before tax Taxation Profit/(loss) for the period 2021 2020 EM EM 2,224.50 2,070.60 2,193.70 1,963.50 -7.90 -9.00 0.50 23.20 1.60 0.00 25.00 121.30 0.60 3.80 -17.20 -14.50 8.40 110.60 -22.20 -23.10 -13.80 87.50 Statement of Financial Position (Balance sheet) Assets Non-current assets Intangible assets Property, plan and equipment Investments In Joint ventures Deferred tax assets Other assets Current assets Inventories Trade and other receivables Current tax assets Cash and cash equivalent Total assets Llabilitles Current Liabilities Loans and borrowings Current tax Ilabilities Trade and other llabilities Provisions Non-current llabilities Total Liabilities Net assets Equity Number of shares Dividends Share price 2021 2020 EM EM 153.40 170.90 422.00 399.20 4.60 3.70 26.90 39.30 21.50 23.70 628.40 636.80 80.30 72.60 610.90 589.20 14.70 18.70 110.50 67.70 816.40 748.20 1,444.80 1,385.00 48.30 -19.10 -42.80 -18.60 -474.40 -10.80 -546.60 452.90 -999.50 445.30 445.30 72.00 26.30 4.96 480.50 -10.30 -558.20 -354.60 -912.80 472.20 472.20 72.00 20.80 m 9.73 million