Smyth Limited and Jones Limited are companies operating in a similar market. You 100% of sales and purchaps were made on credit. Income statement for the year ended 31 December 2020 Tumover Opening inventory Add purchases Les closing inventory Cost of sales Gross profit Expenses Profit before Interest Smyth Umlad 1000 214,200 4,200 160.950 4,500 160.650 53,550 22,230 31,320 270 31,050 8.100 22,950 Jonas Limited 2000 216.000 9,600 152,400 10,800 151,200 64,800 42,300 22,500 900 21,600 5.400 16,200 Profit before tax TSX Profit after tax Balance sheets as at 31 December 2009 Jones Limited Smyth Limited 2000 135,000 216,000 Non current assets Tangible assets Current assets Inventory Recounts receivable 4,500 18,000 900 10.800 5.400 0 23.400 158.400 16,200 232,200 2,700 9.000 Non current liabilities Long term loan Current liabilities Accounts payable Overdraft 6,990 0 8,100 1,350 510 5.400 15,090 140.610 7 260 215.940 Financed by: Ordinary shares of 1 each Reserves 108,000 32,610 140.610 207.000 8.940 215,940 Required a) Calculate the following ratios for Smyth Limited and Jones Limited Required a) Calculate the following ratios for Smyth Limited and Jones Limited Gross profit margin Net profit margin Current ratio iv. Acid test ratio v Average inventory days vi. Average settlement period for receivables Average settlement period for payables viii. Retum on capital employed 13 marks b) Using the ratios calculated above comment on the profitability, liquidity and efficiency of the two companies 12 marks 25 marks