Required: (a) Calculate for both years two ratios that relate to gearing. Show your workings. [8 Marks]

(b) Discuss the ratios calculated above and identify any favourable/adverse movements since 2015. [14 Marks]

(c) Discuss the problems that can arise when using ratio analysis. [8 Marks

Assigiment ONE. Prebum 1 P.:.9. MCMT1916 Sel oul below are the financial statements for KLEE inc. Limited: Profil and Loss Accounts (\$) 2015(50003)2016(50003) Siles Pruft belore ifterest snd tax Interest Pisft on ordinary activites belore tacation Taxatien Proft en ordirary acthites after taxation Dhidends Retsined prof Balance Sheets (\$) Fined Assets Fined Assels Current Assets Slock Debiors Cash Current Lisbilities Trade Credlors Taxaticn payatle Proposed dindend Net Current Assets 265 24 317 Creditors: Amounts faling due after more than one year 10% Detentures Tolai Nes Assels Shareholders Funds Share Ceplal Profit and lass accourt. 290 84107429451530 5b Assigiment ONE. Prebum 1 P.:.9. MCMT1916 Sel oul below are the financial statements for KLEE inc. Limited: Profil and Loss Accounts (\$) 2015(50003)2016(50003) Siles Pruft belore ifterest snd tax Interest Pisft on ordinary activites belore tacation Taxatien Proft en ordirary acthites after taxation Dhidends Retsined prof Balance Sheets (\$) Fined Assets Fined Assels Current Assets Slock Debiors Cash Current Lisbilities Trade Credlors Taxaticn payatle Proposed dindend Net Current Assets 265 24 317 Creditors: Amounts faling due after more than one year 10% Detentures Tolai Nes Assels Shareholders Funds Share Ceplal Profit and lass accourt. 290 84107429451530 5b