770 810 Inventories 470 340

20X7 20X6
£000 £000

ASSETS Non-current assets Current assets

Trade and other receivables Cash and cash equivalents

Total assets
EQUITY AND LIABILITIES Equity

470 360 20 40 960 740 1,730 1,550

Questions
Equity share capital

Retained earnings Total equity Non-current liabilities

350 350

790 325 1,140 675

Borrowings 50 150 Current liabilities

Trade and other payables 270 455

Taxation 240 270 Borrowings 30 –

540 725 Total equity and liabilities 1,730 1,550

Required:
(a) Perform horizontal and vertical analyses on these financial statements.
(b) Comment on what this shows and identify the areas requiring particular investigation.

2 The statements of profit or loss for the years ended 31 December 20X9 and 20X8, and the
statements of financial position at these dates for Squirt Ltd are shown as follows.

Statements of profit or loss for the years ended

Revenue 1,200 900

Cost of sales
Gross profit
Operating expenses
Operating profit
Interest (60) (15) Profit before tax 240 135 Taxation (90) (45) Profit for the year 150 90

Statements of financial position at 31 December