Use the following financial statements for two similar types of retail store to answer the following questions.

Summary of financial Statements

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Trading & Profit & Loss A/C R Ltd.S Ltd.

$$$$

Sales80,000120,000

Less cost of goods sold

Opening stock25,00022,500

Add purchases50,000 91,000

75,000113,500

Less closing stock(15,000)(17,500)

(60,000)(96,000)

Gross profit20,00024,000

Less depreciation1,0003,000

Other expenses9,0006,000

(10,000)(9,000)

Net Profit10,00015,000

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Balance Sheet

Fixed Assets

Equipment at cost10,00020,000

Less depreciation to date(8,000)(6,000)

200014,000

Current assets

Stock15,00017,500

Debtors25,00020,000

Bank5,0002,500

45,00040,000

Less current Liabilities

Creditors(5,000)(10,000)

40,00030,000

42,00044,000

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Financed By:

Capital38,00036,000

Net Profit10,000 15,000

48,00051,000

Less Drawings(6,000)(7,000)

42,00044,000

==========

Required:

Calculate:

i)Gross profit as a percentage of sales

ii)Net profit as a percentage of sales

iii)Expenses as a percentage of sales

iv)Stock turn over

v)Current ratio

vi)Acid test ratio

vii) Debtor to sales ratio

viii)Creditor to purchases ratio (16 marks)

ix)Group each of the above under the respective ratio category ( 4marks)

x)Comment on the ratios ( 5 marks)