The following information relates to the business of Best and Less Pty Ltd. The management of the company are concerned about the profitability and financial structure of the business at 30 June 2023. The bank are requesting payment of the business overdraft.

30 June 2023 30 June 2022

Revenue (all sales are on credit) $70 000 $52 500

Cost of sales 49 750 34 250

Other expenses 18 250 14 000

Cash and cash equivalents (16 000) 14 000

Inventories 27 250 18 500

Trade accounts receivable 25 000 14 000

Non current assets (net) 38 500 23 000

Trade accounts payable 9 250 9 500

Share Capital 54 000 60 000

Non current liabilities 11 500 --

Inventory at 1 July 2021 $22 500

Required:

(a) Calculate the following ratios for 2022and 2023

i. Profit Margin

ii. Return on capital

iii. Current

iv. Quick ratio

v. Equity ratio

vi. Inventory turnover

(b) Write a short report to management in relation to the profitability and financial stability of the business.