This report provides a detailed financial ratio analysis of RS plc, examining its profitability, liquidity, efficiency, gearing, and investment potential for the years 2019 and 2020. The analysis includes calculations and interpretations of key ratios such as gross profit, operating profit, net profit, return on capital employed (ROCE), current ratio, quick ratio, inventory turnover, accounts receivable turnover, capital gearing ratio, return on investment (ROI), and price/earnings (P/E) ratio. The report identifies trends, such as a slight decrease in gross profit and operating profit, and a significant decrease in ROCE and ROI, alongside an increase in the capital gearing ratio. Recommendations are made to increase equity to mitigate debt and optimize resource utilization rather than expanding through debt. The analysis concludes that ratio analysis is crucial for assessing a company's financial health and aiding in investment decisions.
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