Harold Smart, who is a small manufacturer trading as Space Age Projects, is very pleased with his recently completed financial results which show that a planned 20 per cent increase in turnover has been achieved in the last accounting year.

Since 30 September 2010, Harold Smart has not taken any drawings from the business. Harold Smart has been invited recently to invest £150,000 for a five-year fixed term in government loan stock earning interest at 121 /2 per cent per annum. Note: Taxation is to be ignored. Notwithstanding his response to these financial results, Harold Smart is a very cautious person and therefore has asked a financial consultant for a report. Required:

(a) A schedule of six accounting ratios or measures of resource utilisation covering each of the three years ended 30 September 2013 of Space Age Projects.

(b) As financial consultant prepare a report to Harold Smart on the financial results of Space Age Projects given above including comments on the alternative future actions that he might take. Note: Reports should utilise the information given in answers to part

(a) of this question. (Association of Accounting Technicians)

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The summarised results relating to the last three financial years are as follows: Year ended 30 September 2011 90,000 (74,000) 16,000 (3,000) 13,000 Sales Cost of sales Gross profit Administrative overheads Net profit As at 30 September Non-current assets: At cost Provision for depreciation Current assets: Inventory Accounts receivable Balance at bank Current liabilities: Accounts payable Bank overdraft 2010 155,000 (42,000) 113,000 3,000 14,000 2,000 19,000 5,000 5,000 2011 165,000 (45,000) 120,000 4,000 19,000 1,000 24,000 4,000 4,000 2012 100,000 (75,000) 25,000 (5,000) 20,000 2012 190,000 (49,000) 141,000 7,000 15,000 3,000 25,000 6,000 6,000 2013 120,000 (92,000) 28,000 (6,000) 22,000 2013 206,000 (53,000) 153,000 30,000 10,000 40,000 9,000 2,000 11,000