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The abbreviated financial statements of Ted Baker PLC, a British fashion retailer, for the years 2018 and 2019 are presented below:

Income statement for the year ended 31 January 2018 2019 Sales Revenue 591,670 617,442 Cost of Sales (230,865) (257,347) Gross Profit 360,805 360,095 Selling and Administrative Expenses (285,402) (293,485) Operating Profit or Loss 75,403 66,610 Interest Expense (3,301) (3,777) Income Before Tax 68,789 50,857 Income Tax Expense (16,045) (10,129) Net Income 52,744 40,728 Statement of financial position as at 31 January 2018 2019

Current Assets Cash & Cash Equivalents 16,712 14,654 Short-Term Investments 666 0 Trade Receivables 64,273 78,604 Inventory 187,227 225,849 Total Current Assets 269,356 319,686 Property Plant and Equipment 139,075 131,865 Other Intangible Assets 34,373 43,673 Total Non-current Assets 179,808 184,904 Total Assets 449,164 504,590 Current Liabilities Trade Payables 82,858 108,628 Total Current Liabilities 176,841 211,954 Total Non-current Liabilities 48,273 47,918 Total Liabilities 225,114 259,872 Stockholders' Equity Common Stock 2,224 2,228 Retained Earnings 214,376 227,262 Total Stockholder Equity 224,050 244,718 Total Liabilities and Equity 449,164 504,590 [Question 1 is continued on the next page]

Module Code: 4ACCN006W Page 5 of 2

[Question 1 is continued from previous page]

Required: a) Calculate the following financial ratios, to one decimal place, for both 2018 and 2019: (Prepare a Table showing all calculations for each year) i. Gearing ratio ii. Interest cover ratio iii. Gross profit margin iv. Operating profit margin v. Return on capital employed (ROCE) vi. Current Ratio vii. Quick ratio viii. Inventories turnover period ix. Average settlement period for receivables

(18 marks)

a) Using the ratios calculated in (a) and any other information that you consider helpful, evaluate the companys performance over the two years from the viewpoint of a prospective investor.

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