a. Computation of Relevant Ratios

Interpretation of the Ratios:

• Current ratio: The ratio is very high in both years, indicating that the centre is carrying excess liquid capital. A ratio of 2:1 is typically seen as ideal.
• Acid test ratio: Similar to the current ratio, this indicates idle cash in the business, suggesting that the centre is tying up too much cash that could be invested elsewhere.
• Working capital/Total assets ratio: This is within an acceptable range and beneficial for the growth of the centre.
• Total debts/Total assets ratio: The debt level is manageable, but using more debt could bring tax advantages, as interest on debt is tax-deductible.
• Long-term debts/Total assets ratio: This ratio indicates a strong reliance on long-term debt to finance assets, which can be beneficial for tax purposes.

b. Analytical Review Techniques:

1. Developing an independent expectation of the financial position based on known data.
2. Identifying significant variances between expected and reported results.
3. Investigating these variances to determine the underlying causes.

c. Difference in Performance Appraisal for Profit-Oriented vs. Public-Oriented Entities:

• Profit-Oriented: Focuses on metrics like revenue growth, profitability, and customer satisfaction.
• Public-Oriented: Performance is appraised based on adherence to budget, achievement of policy objectives, and public accountability.