Chapter 6
The following are the financial statements of Colmar Ltd, a retailer, for last year and this
year:
Profit and loss account for the year ended 31 December:
last year
£000
499
335
164
127
37
13
24
8
16
6
10
74
84
Turnover
Cost of sales
Gross profit
Operating expenses
Operating profit (before interest and taxation)
Interest payable
Profit before taxation
Taxation
Profit after taxation
Dividend paid and proposed
Retained profit for the year
Retained profit brought forward from the previous year
Retained profit carried forward
this year
£000
602
423
179
148
31
22
9
3
6
6
84
84
Balance sheet as at 31 December:
last year
£000
Fixed assets
Current assets
Stocks
Debtors
Cash
Creditors: amounts falling due
within one year
Creditors
Taxation
Dividends
Net current assets
Creditors: amounts falling due
within one year
Bank loan
Capital and reserves
Ordinary shares of £0.50 each
Capital reserves
Retained profit
this year
£000
110
68
80
6
154
83
96
2
181
65
8
6
79
110
6
116
£000
125
75
185
65
190
55
130
60
130
13
33
84
130
13
33
84
130
Required:
(a)
£000
Calculate the following eight accounting ratios for both years:







(b)
return on capital employed
return on ordinary shareholders’ funds
gross profit margin
net profit margin
current
acid test
average stock turnover period
Discuss, on the basis of your answers to part (a), differences between the two years
regarding the business’s performance and position.