You have been supplied data for Royal Plastic Ltd. and its industry averages.

(a) Determine the indicated ratios for the Royal Plastic Ltd.

(b) Indicate the company’s strengths and weaknesses in terms of liquidity, solvency and profitability, as revealed by your analysis.

Liabilities Equity share capital 10% Preference share capital Retained earnings Long-term debt Sundry creditors Outstanding expenses Other current liabilities Sales net Less: Cost of goods sold Selling expenses Balance sheet, March 31, current year Assets Plant and equipment 40,000 Cash 27,400 Debtors 34,000 Stock 31,500 1,200 26,000 2,60,100 Statement of profit, year ended March 31, current year Administrative expenses Research and development expenses Interest Earnings before taxes Less: Income taxes (0.35) Net income Dividends paid to equity holders 1,00,000 *1,52,500 29,500 14,800 6,500 2,900 1,51,000 12,300 36,000 60,800 2,60,100 2,25,000 2,06,200 18,800 6,580 12,220 5,000