Heavy Goods pic carries on business as a manufacturer of tractors. In 2004 the company was looking for acquisitions and carrying out investigations into a number of possible targets. One of these was a competitor, Modern Tractors pic. The company's acquisition strategy was to acquire companies that were vulnerable to a takeover and in which there was an opportunity to improve asset management and profitability.
The chief accountant of Heavy Goods pic has instructed his assistant to calculate ratios from the financial statements of Modern Tractors pic for the past three years and to prepare a report based on these ratios and the industry average ratios that have been provided by the trade association. The ratios prepared by the assistant accountant and the industry averages for 2004 are set out as follows.

Required:
You are required to write a full appraisal and report.

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lndustry average (%) 2003 2002 2004 2004 8.25 Sales growih Sales/hotal assets Saleshet fixed assets Sales/working capital Salesidebtors Gross profit/sales Profit bafore taxsales Profit betore intoresinterest Profit atter taxhotal assets Profit alter tadlequity Net fixed assetstotal assets Net fixed assets/equity Equity/total assets Total liabilitiestotal assets Total liabilities/equty Long-term debttotal assets Current liabilities/total asset Current assets/current 40.00 2.05 3.59 -140.00 1 83 294 21 43 37,50 18 67 8.00 6.45 10.81 16.00 38 33 22,62 17.62 26.57 27.B0 19.57 1.74 14.50 13 24 4.95 8 97 57 14 62.20 3 64 8.29 8171 447 36.59 45 12 0 84 57,07 19 12 058 58 54 37 07 62.93 33 45 66 55 18.54 44. 39 29 27 37 28 19.00 Current assets stock 0,43 0.72 0.58 current liabilition Stocktotal assets Cost of salesistock Cost of sales/creditors Debtors/total assets Cashhotal assets 1707 8 71 6.10 18.54 8 .55 6 25 2.93 21.46 4.63 8 81 1 90 12 87 18.40 9.60 25 08