The financial statements for Harridges Ltd are given below for the two years ended 30 June 2014 and 2015. Harridges Limited operates a department store in the centre of a small town.

Dividends were paid on ordinary shares of ?65,000 and ?75,000 in respect of 2014 and 2015 respectively.

Required:(a) Choose and calculate eight ratios that would be helpful in assessing the performance of Harridges Ltd. Use end-of-year values and calculate ratios for both 2014 and 2015.(b) U sing the ratios calculated in (a) and any others you consider helpful, comment on the business?s performance from the viewpoint of a prospective purchaser of a majority of shares.

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Income statements for the years ended 30 June 2015 2014 £000 £000 2,600 (1,560) Sales revenue 3,500 (2,350) Cost of sales Gross profit Wages and salaries Overheads 1,040 (320) (260) (150) 1,150 (350) (200) (250) Depreciation Operating profit Interest payable 310 350 (50) (50) Profit before taxation 300 260 (125) Taxation (105) Profit for the year 155 175 Statement of financial position as at 30 June 2014 2015 £000 £000 ASSETS Non-current assets Property, plant and equipment Current assets 1,265 1,525 Inventories 250 400 Trade receivables 105 145 Cash at bank 380 115 735 660 Total assets 2,000 2,185 EQUITY AND LIABILITIES Equity Share capital: £1 shares fully paid Share premium Retained earnings 490 490 260 260 350 450 1,100 1,200 Non-current liabilities Borrowings – 10% loan notes Current liabilities 500 500 300 Trade payables Other payables 375 100 110 400 485 Total equity and liabilities 2,000 2,185