The following are the financial statements of D Limited, a wholesaling company, for the year ended 31 December:

The following information should be taken into consideration.
1 You may assume that:
(i) The range of products sold by D Limited remained unchanged over the two years;
(ii) The company managed to acquire its products in 2018 at the same prices as it acquired them for in 2017;
(iii) The effects of any inflationary aspects have been taken into account in the figures.

2 Ignore taxation.
3 All calculations must be shown to one decimal place.
You are required, using the information above, to assess and comment briefly on the company, from the point of view of:
(a) Profitability;
(b) Liquidity.

Transcribed Image Text:

Statements of Profit or Loss Revenue - credit sales cash sales Cost of sales Gross profit Distribution costs Administration expenses Operating profit Interest payable Profit before tax Statements of Financial Position as at 31 December Tangible non-current assets Current assets: Inventory Accounts receivable Cash at bank Total assets Current liabilities: Trade accounts payable Non-current liabilities Loan notes Shareholders' funds 2017 £000 2,200 200 2017 £000 544 384 8 256 2017 £000 2,400 (1,872) 528 (278) (112) 138 138 2017 £000 220 936 1,156 (256) 900 2018 £000 2,640 160 2018 £000 660 644 110 338 320 2018 £000 2,800 (2,212) 588 (300) (114) 174 (32) 142 2018 £000 286 1,414 1,700 (658) 1,042