The financial statements for the current year (2011) and the preceding one are summarised below:

You are required to comment on:

(a) The profitability

(b) The liquidity

(c) The operational performance and

(d) The capital structure of Burstow Ltd, supporting your answer with pertinent accounting ratios.

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Statements of financial position as at 30 September 2010 £ 70,000 65,000 135,000 Non-current assets: Premises Plant and equipment £ Current assets: 51,200 Inventory 29,700 15,600 Cash and bank 96,500 231,500 Trade receivables 100,000 Share capital £1 each 2011 £ 150,000 162,000 312,000 85,300 55,700 3,500 144,500 456,500 £ 120,000 2010 £ 386,400 29,600 310,720 (31,200) (309,120) 77,280 (43,400) (14,680) Statement of income for year to 30 September Sales Inventory on 1.10. Purchases Inventory on 30.9. Cost of sales Gross profit Admin. expenses Distribution cost Interest 19,200 (4,600) Taxation 14,600 Profit before tax 2011 £ 764,200 51,200 682,400 (85,300) (648,300) 115,900 (37,650) (24,650) (7,000) 46,600 (20,000) 26,600