The following financial statements relate to Hope plc:
Income statement (profit and loss account)
for the year ended 30 June Year 4
.................................................................................... £000s
Revenue .......................................................................... 6,200
Cost of sales ................................................................... (2,750)
Gross profit .......................................................................3,450
Administration and selling expenses ....................................... (2,194)
Operating profit ................................................................. 1,256
Debenture interest ................................................................. (84)
Profit before taxation ........................................................... 1,172
Taxation ........................................................................... (480)
Profit for equity holder ........................................................... 692
The directors have recommended a dividend of 36.7 pence per share in respect of Year 4, to be paid following approval at the next annual general meeting.
Statement of financial position (balance sheet)
as at 30 June Year 4
........................................................................................ £000s
Non-current (fixed assets) net of depreciation .................................. 1,750
Current assets:
Inventory .............................................................................. 620
Trade receivables (debtors) ....................................................... 1,540
Cash .................................................................................... 200
Total current assets ................................................................ 2,360
Total assets .......................................................................... 4,110
Current liabilities:
Trade payables (creditors) ........................................................ (300)
Other creditors and accruals ...................................................... (940)
Total current liabilities ........................................................... (1,240)
Non-current liabilities
6% debentures .................................................................. (1,400)
Total liabilities .................................................................. (2,640)
Net assets ............................................................................ 1,470
Share capital and reserves
Issued share capital:
900,000 ordinary shares of 50p nominal value .............................. 450
Retained earnings .............................................................. 1,020
..................................................................................... 1,470
Required
(a) Calculate ratios which measure:
Liquidity and the use of working capital;