Comparative figures from the statement of financial position for Warder Ltd are shown below.

Required

(a) Prepare common size statements for the company for both years, and comment on what this analysis reveals about Warder’s financing policy.

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Current assets Cash at bank Accounts receivable Inventory Non-current assets Term deposit Plant and equipment (net) Total assets Current liabilities 2025 $122.000 164 000 2024 $ 75 000 162 000 85 000 258 000 371 000 495 000 144 000 120 000 640 000 480 000 784 000 600 000 1 155 000 1 095 000 Accounts payable 137 000 156 000 Mortgage 80 000 217 000 60 000 216 000 Non-current liabilities Mortgage 320 000 300 000 320 000 300 000 Total liabilities 537 000 516 000 Net assets Equity $618,000 $ 579 000 Share capital Retained earnings $400 000 218.000 $ 618,000 300 000 279 000 $ 579 000