The directors of Q Read Co. wish to compare the company's most recent financial statement with those of the previous year. The company's financial statements are given below:

Statement of profit and loss

Year ended 31stMarch

20212020

000000

Sales revenue2,5001,800

Cost of Sales(1,800)(1,200)

700600

Distribution costs(250)(200)

Administrative expenses(200)(160)

Profit from operations250240

Finance costs(50)(50)

Profit before tax200190

Income tax(46)(44)

Profit for the year154146

Note: cost of sales figures are made up as follows:

Opening inventory200180

Purchases1,9601,220

Less Closing inventory(360)(200)

Cost of sales1,8001,200

Statement of financial position

31/3/2131/3/20

000000000000

Assets

Non-current assets3,6743,100

Acc Depn(1,422)2,252(1,214)1,886

Current Assets

Inventory360200

Trade receivable750400

Cash at bank1201,230100700

Current liabilities

Trade payables380210

Sundry payables430260

Income tax50(860)48(518)

Non-current assets

10% Loan notes(500)(500)

2,1221,568

Equity

Issued ordinary SC1,2001,000

Share premium600400

Retained earnings322168

2,1221,568

Notes: additional share capital was issued on 1stApril 2021

Required

(a)Calculate, for each of the 2 years, eight accounting ratios which should assist the directors in their comparison, using closing figures for items in the statement of financial position(8 marks)

(b)Suggest possible reasons for the changes in the ratios between the 2 years