The following ratios have been calculated as a result of analysing the end of year financial statements of Horizon Stores, a business owned by Robin Spencer. The profitability ratios are as follows.

Revenue figures for each of these years are as follows:

The liquidity ratios for this business are:

The efficiency ratios for this business are:

The typical efficiency ratios are as follows:

a. Comment on the trend in revenue and the business's profitability during the three-year period. 

b. Comment on the business's liquidity during the three-year period. 

c. Comment on the business's efficiency ratios during the three-year period. For each ratio: 

i. Describe the trend and state whether this is a strength or a weakness or represents a mixed position. 

ii. Explain what the trend means for the business.

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For the year ended 31 December 2012 2013 2014 Gross profit margin 40% 38% 37% Mark-up 67% 61% 59% Profit/revenue 14% 13% 11% Wages/revenue 8% 9% 10% Other expenses/revenue 3% 4% 5% Return on capital employed 12% 11% 10%