During the year to 31 December 2017, Tinderlake Ltd attempted to stimulate sales and increase its profits by reducing selling prices, holding larger inventories and giving customers longer credit. All of the company's purchases and sales are on credit terms. Summarised financial statements for the year to 31 December 2017 (with comparative figures for 2016) are as follows:

Tinderlake Ltd.

Statements of comprehensive income for the year to 31 December.

Statements of financial position as at 31 December.

Ordinary dividends of ?400,000 were paid during the year to 31 December 2017.

Required:

Calculate the following ratios for Tinderlake Ltd for each of the two years concerned and comment on the results of these calculations:

(a) Return on capital employed.

(b) Return on equity.

(c) Gross profit margin.?

(d) Net profit margin.

(e) Current ratio.

(f) Quick assets ratio.

(g) Inventory holding period.?

(h) Receivables collection period.

(i) Capital gearing ratio.

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2017 2016 £000 £000 Sales revenue 5,327 4,420 3,725 2,905 Cost of sales Gross profit Operating expenses 907 820 87 75 Profit before interest and taxation 820 745 Interest payable 130 20 Profit before taxation 690 725 Тахation 215 225 Profit after taxation 475 500 2017 2016 £000 £000 Assets Non-current assets Property, plant and equipment Current assets 5,120 4,700 Inventories 1,334 1,278 11 2,623 730 Trade receivables 596 Bank 400 1,726 7,743 6,426 Equity Ordinary shares of £1 Retained earnings 2,000 3,508 2,000 3,433 5,508 5,433 Liabilities Non-current liabilities Long-term loans Current liabilities 1,000 150 Trade payables 1,020 618 Taxation 215 1,235 225 843 7,743 6,426