The annual accounts of the Wholesale Textile Company Ltd have been summarized for 2011 and 2012 as follows:

You are informed that:1. All sales were from stocks in the company’s warehouse.2. The range of merchandise was not changed and buying prices remained steady throughout the two years.3. Budgeted total sales for 2012 were £780,000.4. The debenture loan was received in 1 January 2012, and additional fixed assets were purchased on that date.

Task:Perform a ratio analysis to assist the management of the company to measure the efficiency of its operation, including its use of capital. Your answer should name the ratios and give the figures (calculated to one decimal place) for 2011 and 2012. Discuss possible reasons for changes in the ratios over the period. (Ratios relating to capital employed should be based on the capital at the year-end. Ignore taxation.)