Ng has been in business for many years buying and selling goods on credit . He is having difficulty in meeting the payments to his trade payables and the bank refuses to allow him an overdraft.

The following information relates to the last two trading years ended 30 September 2023 and 30 September 2024.

Additional information Inventory at 1 October 2022, \(£ 20,000\)
Required:

(a) Calculate for the years ended 30 September 2023 and 30 September 2024 the:
- percentage gross profit to revenue - rate of inventory turnover - return on capital employed - trade receivables collection period in days - current ratio - liquid (acid test) ratio.

(b) State four ways in which \(\mathrm{Ng}\) could improve his bank balance.

(c) Evaluate the financial position of \(\mathrm{Ng}\).

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Revenue Cost of sales Expenses (including loan interest) Net profit for the year Non-current assets Inventory Trade receivables Bank Trade payables 10% loan (long term) Capital 30 September 2023 f 300,000 150,000 130,000 20,000 60,000 30,000 20,000 20,000 30,000 50,000 50,000 30 September 2024 420,000 210,000 170,000 40,000 95,000 24,000 40,000 1,000 50,000 40,000 70,000