$\text { Brad's Engineering Pty Ltd }$ REQUIRED:
A)From the Information Provided Above,calculate Each of the Following

Essay

$\text { Brad's Engineering Pty Ltd }$
$\begin{array}{lll}&2015&2014\\\text { Statement of financial positions as at } 30 \text { June }&\$&\$\\\text { Total Current Assets } & 11,080 & 10,280 \\\text { Total Fixed Assets } & 75,000 & 42,000\\\text { TOTAL ASSETS }&\$86,080&\$52,280\\\text { Total Current Liabilities } & 3,400 & 1,960 \\\text { Long-term Liabilities } & \underline{20,000} & 8,500 \\\text { TOTAL LIABILITIES }&\$23,400&\$10,460\\\\\text { NET ASSETS (Assets - Liabilities) } & \$ 62,680 & \$ 41,820 \\\\\text { SHAREHOLDERS' EQUITY } & & \\\text { Share capital } & 40000 & 30000 \\\text { Reserves and retained profits } & 22,680 & 11,820\\&\$62,60&\$41,820\\\\\text { Additional Information: }\\& 2015 & 2014 \\\text { Net profit after interest \& tax } & \$ 10,860 & \$ 6,000 \\\text { Interest expense } & 2,000 & 900 \\\text { Taxation expense } & 3,000 & 1,500\end{array}$
REQUIRED:
a)From the information provided above,calculate each of the following ratios for each of the years ending 30 June 2014 and 2015.
Gearing ratio.Use formula
$\frac{\text {Long term liabilities }}{\text { Share capital and reserves + long term liabilities}}$
Interest cover ratio.Use formula
$\frac{\text {Profit before interest and tax }}{\text {Interest }}$
b)Comment on the movements in the ratios over the two years and the adequacy of the level of gearing and interest cover.