The following are a condensed 20X1 income statement and a 31 December 20X1 balance sheet for Franklin Business.

On 1 January 20X1 the accounts receivable were \(\$ 8470\), the inventory was \(\$ 15330\), the total assets were \(\$ 154000\) and the owner's capital was \(\$ 87640\). The business makes 60 per cent of its net sales on credit and operates on a 300-day business year. At the end of 20X0, the following ratio results were calculated, based on the business' financial statements for 20X0.

The business has hired you to update its ratio results and compare its performance in 20X1 with that in \(20 \mathrm{X} 0\).
Required:
a Calculate the preceding ratios for \(20 \mathrm{X} 1\).
b Write a short report that compares the business' performance in 20X1 with that in 20X0 regarding its liquidity, financial flexibility, operating capability and profitability.

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Sales (net) Cost of goods sold Gross profit Operating expenses Interest expense Net Income FRANKLIN BUSINESS Income Statement For year ended 31 December 20X1 $ 215600 127 820 87 780 -66 220 -3920 17 640