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Transcription of this question: 5.Due to the loss that was made in 2006, Organix has commissioned a report from Seagers, a firmOf accountants. However, due to a breakdown in communication over the deadline for the report,it has been delayed for several months. Max is trying to establish further the cause Of the lossand so has collected together appropriate financial documents to prepare some draft accounts.However, the documentation is incomplete and only includes the figures below.Figures (for year ending 31 December 2006)Total sales revenueGross fitEx ensesNet profit before tax and interestInterestTaxNet rofit after tax and interestFigures (as at 31 December 2006)Fixed assetsCashStockDebtorsCurrent liabilitiesNet assetsLoan ca italRetained profitCapital employed975230265-3535-7080029715064886745141886(i)(ii)Define the term gross profit.Using thefigures above, prepare the balancesheet(asat 31 December 2006)and the profit and loss account (for the year ended 31 December 2006)for Organix.(b)(c)Using the balance sheet and profit and loss account prepared in (a), calculatethe following:(i) gross profi t margin(ii) net profit margin(iii) current ratio(iv) acid test ratio.Discuss two reasons for Organix suffering a loss in 2006 (lines 137-139).[2 marks/[6 marks][4 marks][8 marks]

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