Chapter 3 • Financial statements and their interpretation
3.3*The following are the financial statements of Persona Ltd for last year and this year:
Income statement for the year ended 31 December
Last year This year
£000 £000
Turnover 499 602
Cost of sales (335) (423)
Gross profit 164 179
Operating expenses (127) (148)
Operating profit 37 31
Interest payable (13) (22)
Profit before taxation 24 9
Taxation (8) (3)
Profit for the year 16 6Balance sheet as at 31 December
Last year This year
£000 £000
Non-current assets 110 125
Current assets
Inventories 68 83
Trade receivables 80 96
Cash 6 2
154 181
Total assets 264 306Equity
Ordinary shares of £0.50 each 13 13
Capital reserves 33 33
Retained profit 84 84
130 130
Non-current liabilities8.6 Convertible loan notes
Current liabilities
Trade payables 71 116
Taxation 8 –
79 116
Total equity and liabilities 264 306Calculate the following ratios for both years:
lReturn on capital employed
lReturn on ordinary shareholders’ funds
lGross profit margin
lOperating profit margin
lCurrent ratio
lAcid test ratio
lInventories turnover period.