Zanto Ltd is a private company in Ghana and extracts from its most recent financial statements are provided below: Statement of profit or loss for the year ended 31 March   2017                       2018 GH¢                       GH¢ Sales                                                                                                                                      50,000                  36,000 Cost of sales                                                                                                                       (30,000)                (24,000) 20,000                  12,000 Profit from sale of division                                                                                            -                               1,000 Distribution costs                                                                                                             (5,300)                 (3,500) Finance costs                                                                                                                     (2,900)                 (4,800) Administrative costs                                                                                                            (800)                (400)  11,000                 4,300 Income tax expense                                                                                                         (3,300)                 (1,300) Profit after tax and for the year                                                                                     7,700                  3,000   Statement of financial position as at 31st March   2017                    2018 Assets                                                                                                                                      GH¢                    GH¢ Non- current assets Property, plant and equipment                                                                                  19,000                 16,300 Goodwill                                                                                                                                 2,000                      -   21,000                16,300 Current assets Inventories                                                                                                                            5,800                 3,400 Trade receivables                                                                                                                2,400                  1,300 Cash at bank                                                                                                                              -                       1,500     8,200                 6,200   29,200                22,500 Ordinary share capital (issued at GH¢1 each)                                                           10,000               10,000 Retained earnings                                                                                                                4,000                 3,000                                                                                                                                                    14,000               13,000 Non-current liabilities 10% debenture loan                                                                                                           8,000                 4,000 Current liabilities Trade payables                                                                                                                     3,100                 4,300 Income tax payable                                                                                                             2,700               1,200 Bank overdraft                                                                                                                     1,400                                                                                                                                                   7,200                5,500                                                                                                                                                  29,200              22,500 Required: a) Calculate the following ratios using the information in the financial statements above. i) Operating profit margin ii) Gross profit margin  iii) Return on assets employed

Zanto Ltd is a private company in Ghana and extracts from its most recent financial statements are provided below: Statement of profit or loss for the year ended 31 March

2017                       2018

GH¢                       GH¢

Sales                                                                                                                                      50,000                  36,000

Cost of sales                                                                                                                       (30,000)                (24,000)

20,000                  12,000

Profit from sale of division                                                                                            -                               1,000

Distribution costs                                                                                                             (5,300)                 (3,500)

Finance costs                                                                                                                     (2,900)                 (4,800)

Administrative costs                                                                                                            (800)                (400)

 11,000                 4,300

Income tax expense                                                                                                         (3,300)                 (1,300)

Profit after tax and for the year                                                                                     7,700                  3,000

Statement of financial position as at 31st March

  2017                    2018

Assets                                                                                                                                      GH¢                    GH¢

Non- current assets

Property, plant and equipment                                                                                  19,000                 16,300

Goodwill                                                                                                                                 2,000                      -

  21,000                16,300

Current assets

Inventories                                                                                                                            5,800                 3,400

Trade receivables                                                                                                                2,400                  1,300

Cash at bank                                                                                                                              -                       1,500

    8,200                 6,200

  29,200                22,500

Ordinary share capital (issued at GH¢1 each)                                                           10,000               10,000

Retained earnings                                                                                                                4,000                 3,000

                                                                                                                                                   14,000               13,000

Non-current liabilities

10% debenture loan                                                                                                           8,000                 4,000

Current liabilities

Trade payables                                                                                                                     3,100                 4,300

Income tax payable                                                                                                             2,700               1,200

Bank overdraft                                                                                                                     1,400

                                                                                                                                                  7,200                5,500

                                                                                                                                                 29,200              22,500

Required:

1. a) Calculate the following ratios using the information in the financial statements above.
2. i) Operating profit margin
3. ii) Gross profit margin 

iii) Return on assets employed                                                                                                   

1. iv) Debt to equity 
2. v) Interest cover 
3. vi) Current ratio 

vii) Quick ratio                                                                                                                                   

1. b) C
2. i) profitability 
3. ii) liquidity 

iii) gearing                                                                                                                                           

of the company for the two-year periods based on the ratios computed above and advice management where appropriate.