The following information relates to Style Limited for the two years to 30 June 2016 and 2017, respectively: 

Required:

(a) Calculate the following accounting ratios for the two years 2016 and 2017:

● Gross profit

● Capital turn

● Return on capital employed

● Operating cash flow to operating profit ratio

● Current ratio

● Debt to equity ratio

● Earning per share.

(b) Comment on the company’s performance for the year to 30 June 2016 and its health.

Transcribed Image Text:

Statement of profit or loss for the years 2016 and 2017 2016 Sales (all credit) Less: Cost of goods sold: Opening inventory Purchases (all on credit terms) c/f Less: Closing inventory Gross profit Less: Expenses Net profit b/f £.000 80 995 1075 2016 £000 1 075 (100) £000 1500 £000 1500 (975) 525 (420) 105 2017 £000 100 1400 1500 2017 £.000 £000 1900 £000 1900 1.500 (200) (1300) 600 (495) 105