Update now Editor Question 4 The following financial statements are for Arumugam Trading Income Statement for the year ended 30 June 2019 $ 96,000.00 $ Sales (all credit) less: Cost of Goods Sold Inventories 01/07/2018 Purchases Cost of Goods Available for Sale less: Inventories 30/06/2019 Gross Profit Other Income 10,900.00 $ 66,360.00 $ 77,260.00 $ 13,900.00 I Operating Expenses Net Profit $ 63,360.00 $ 32,640.00 $ 1,000.00 $ 33,640.00 $ 22,120.00 $ 11,520.00 Balance Sheet as at 30 June 2019 Current Assets. $ 11,520.00 Balance Sheet as at 30 June 2019 Current Assets: Accounts Receivable S less: Allowance for Doubtful Debts Inventories S 15,600 600 S Inventories Prepaid Expenses Accrued Revenue Non-Current Assets: S s S 15,000 13,900 100 200 S 29,200 Land S $ S es en 20,000 10,800 16,000 4,000 us 50,800 80,000 Buildings (net) Plant & Equipment (net) Motor Vehicles (net) Total Assets Current Liabilities Bank - Overdraft Accounts Payable Accrued Expenses Non-Current Liabilities Mortgage 4 year Loan (due 31 March 2024) Total Liabilities S S 5,000 10,500 500 S $ 16,000 S 16,000 s. S Net Assets 16,000 32,000 48,000 S Owner's Equity Capital A. Bowman 1 July 2018 Add: Net Profit for the year S 44,480 $ 11,520 56,000 8,000 Less: Drawings is in S 48,000 Iccessibility Investigate Extra Information 30/06/2018 Industry Averages Gross Profit Rate 40.0% 35.0% Net Profit Rate 13.5% 15.0% Current Ratio 161 2.0 : 1 Quick Ratio 13 1 1.21 Inventory Turnover Rate 5.8 times 5 times Average Collection Period . 50 days 45 days . en 48,000 F (b) Based on the ratios you have calculated, and the other information given, comment briefly on each of the following for Arumugam's business: A) Profitability. B) Business Activity. C) Liquidity. (C) Advise Arumugam of possible reasons for any unsatisfactory situations that exist in relation to the business and suggest actions that may be taken to improve them. (Please add extra pages to answer the questions below)