The following are the financial statements of company X L.T.D for the two years shown. Profit statement for the year ended 30 June 2020 2021 Sh. Sh. Sales 3,000,000 4,800,000 Less: cost of goods sold 1,650,000 2,700,000 Gross profit 1,150,000 2,100,000 Less: trading expenses 675,000 825,000 Trading profit 675,000 1,275,000 Less: Debenture interest 37,500 37,500 Net profit before taxation 637,500 1,275,000 Less: Corporation tax 240,000 480,000 Net profit after taxation 397,500 757,500 Less: Ordinary share dividend 187,500 262,500 Undistributed profit for the year 210,000 495,000 Balance sheet as at 30 June 2020 2021 Sh. Sh. Sh. Sh. Fixed assets at cost 1,500,000 2,100,000 Less: Depreciation 300,000 1,200,000 375,000 1,725,000 Current assets: Stock 600,000 825,000 Debtors 375,000 525,000 Cash 120,000 1,350,000 Less: current liabilities 1,095,000 Creditors 217,500 300,000 Taxation 240,000 480,000 Proposed dividend 187,500 262,500 Bank overdraft _______ 97,500 (645,000) (1,140,000) 1,650,000 1,935,000 Financed by: Ordinary share capital (Authorised and issued) 750,000 750,000 Undistributed profits 525,000 1,020,000 10% debentures 375,000 165,000 1,650,000 1,935,000 Required:

a) The credit manager of Equity bank has asked you to present a brief overview on the performance of X l.t.d in five areas, profitability, liquidity, efficiency, gearing and investors interests. Use necessary ratios for such exercise (25marks)

b) Apart from the yearly comparisons that you have performed on this company, point out other comparisons that you can subject this company to? (5 marks)