The balance sheet of a sole trader revealed the following position.
Fixed assets
Land and Buildings R9 170
Equipment at cost less depreciation 15 570
Goodwill at cost less amounts written off 10 250 R34 990

Investment in shares at cost 2 200
Current assets
Trading stock R45 840
Sundry debtors less bad debts written off 19 350
Cash at bank 10 920 R76 110
R113 300 = A
Less Current Liabilities
Sundry Creditors and accruals 77 600
R35 700 = L
Owners Interest
Capital R28 400
Profit for the year 7 300 R35 700 = O

Are the assets correctly classified? If not, rearrange them and give your reasons for so doing.

What is the current ratio? Is it satisfactory?

What is the acid test ratio? Is it satisfactory?

Is the business solvent? Give your reasons.

Is the business overtrading? Give your reasons.

What is the profitability ratio of the business?