Discuss the performance of the company

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Reference no: EM133164271

Micro Limited is a company which has been operating as a building construction company for a number of years. It had enjoyed a period of strong performance earlier in the decade but has seen turnover drop in the recent financial period.

The financial statements of the company for the last two years are shown below:

Statement of comprehensive income for the years ended 31^st March
	2016	2017
	£'000s	£'000s
Sales	2,430	2,135
Cost Of Sales	(1,495)	(1,425)
Gross Profit	935	710
Other Expenses	(770)	(820)
Profit Before Tax & Interest (Operating Profit)	165	(110)
Interest Payable	(25)	(20)
Profit Before Tax	140	(130)
Tax	(35)	(20)
Profit After Tax	105	(150)

Statement of Financial Position as at 31^st March
	2016	2017
*ASSETS*	£'m	£'m
Non-current Assets (NBV)
Land & Buildings	800	800
Plant & Machinery	200	250
Vehicles	40	35
	1,040	1,085
Current Assets
Inventories	240	180
Receivables	280	310
Bank & Cash	70	0
	590	490

TOTAL ASSETS	1,630	1,575

*EQUITY & LIABILITIES*
Equity
Share Capital	200	200
Retained Earnings	980	830
Total Equity	1,180	1,030

Non-Current Liabilities
Long Term Loans	240	200
Total Non-Current Liabilities	240	200

Current Liabilities
Payables	200	230
Tax Liabilities	10	5
Bank Overdraft	0	110
Total Current Liabilities	210	345

TOTAL EQUITY & LIABILITIES	1,630	1,575

Required:

(a) Calculate 10 ratios for years 2016 and 2017, sufficient to enable you to understand the financial performance and position of Micro Ltd.

(b) Discuss the performance of the company for the year ended 31st March 2017 and analyse its financial position as at that date.

Reference no: EM133164271

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