Mujeeb Family Shops is a retailer of exotic products which by the 2019 year end had 25 stores. The company's sales are mainly in cash or with debit/credit cards, but the company also has a small amount of credit sales to key customers. In 2019 the CEO, and founding family member, died suddenly and a new CEO and a new board chairman were appointed.

The new CEO and new board chairman are determined that the company should grow and, to that end, have put in place a programme of expansion with five further stores being opened during 2020. There has also been an extensive programme of refurbishment to the existing stores. The aim is now to sell value products; a wide-reaching advertising campaign has been launched to promote the low-price image. To support this, new suppliers have been found locally who will supply goods at short notice at competitive prices.

Extracts from the companys financial statements for the year ended 31 December 2020, with comparatives are given below:

STATEMENT OF PROFIT OR LOSS FOR THE YEAR ENDED 31 DECEMBER

	2020	2019
	BHD000	BHD000
Revenue	12,700.	9,400.
Cost of sales	(9,000)	(6,400)
Gross Profit	3,700.	3,000.
Operating expenses	(2,300)	(1,900)
Finance costs	(180)	(90)
Profit before tax	1,220.	1,010.
Income tax expense	(370)	(300)
Profit for the year	850.	710.

STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER

	2020	2019
	BHD000	BHD000
Non-current assets
Property, plant and equipment	10,060	7,150
Current assets
Inventories	1,050	1,300
Receivables	160	205
Bank		465
	11,270	9,120
Equity
Share capital (BHD1 equity shares)	4,000	4,000
Retained earnings	2,875	2,350
Non-current liabilities	2,000	1,500
Current liabilities
Bank overdraft	505
Trade payables	1,520	1,005
Tax payable	370	265
	11,270	9,120

From research it is known that the following key ratios are the average for this type of retail organisation:

Gross profit margin	31.5%
Operating profit margin	11.5%
Non-current asset turnover	1.31

Required

(a) Calculate the following ratios (for both years) using the formulas given in brackets:

1) Gross Profit Margin (Gross Profit/Revenue * 100%)

2) Operating Profit Margin (Operating Profit/Revenue *100%)

3) Inventory Holding Period (Inventory Days: Inventory/Cost of sales * 365)

4) Current ratio (Current assets/current liabilities)

5) Non-current asset turnover (Revenue/non-current assets)

(b) From the perspective of an investor, analyse the profitability, efficiency and liquidity of Mujeeb Family Shops based upon the information given and the ratios calculated in (a). The analysis report should include comparisons with the key sector ratios given above.