Set out below are the financial statements for KLEE Inc. Limited: Profit and Loss Accounts...
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Set out below are the financial statements for KLEE Inc. Limited: Profit and Loss Accounts (8) 2016 2015 (S000's) (5000's) 285 290 Sales Profit before interest and tax 92 84 10 10 82 74 29 Interest Profit on ordinary activities before taxation Taxation Profit on ordinary activities after taxation Dividends Retained profit 32 50 15 35 801 1828 Balance Sheets ($) Fixed Assets Fixed Assets 24 58 Current Assets Stock 25 20 Debtors 21 20 Cash 3 8 49 48 Current Liabilities 18 18 Trade Creditors Taxation payable Proposed dividend 11 8 15 15 42 41 Net Current Assets 7 5 31 Creditors: Amounts falling due after more than one year 10% Debentures 10 10 Total Net Assets 21 51 Shareholders' Funds 5 5 Share Capital Profit and loss account 18 48 21 51 Required: (a) Calculate for both years two ratios that relate to gearing. Show your workings. (b) Discuss the ratios calculated above and identify any favourable/adverse movements since 2015 (c) Discuss the problems that can arise when using ratio analysis
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