This question is also based on Ted Baker's Report and Accounts 2012.

Required

(a) Calculate the following ratios for 2012 and 2011. Show the formulae (define any ambiguous terms) and all your workings. In each case, explain the purpose of the ratio and interpret your results from a lender's perspective.

(i) Current ratio.

(ii) Acid test.

(iii) Inventory holding period.

(iv) Trade receivables collection period.

(v) Trade payables payment period.

(vi) Debt/equity.

(vii) Interest cover.

(b) Conclude your analysis with brief comments on any change in the risks to lenders over the period.