3.1

Profit margin	=		X
				1
	=		X
				1
	=

(2 marks)

3.2

Debtors collection period	=		X
				1
	=		X
				1
	=

(3 marks)

3.3

Current ratio	=
	=
	=

(3 marks)

3.4

Debt to assets	=		X
				1
	=		X
				1
	=

(3 marks)

3.5

Return on equity	=		X
				1
	=		X
				1
	=

(3 marks)

3.6

Earnings per share	=		X
				1
	=		X
				1
	=

(3 marks)

3.7

Acid test ratio	=
	=
	=
	=

REQUIRED Use the information provided below to calculate the following ratios for 2020. Also provide a brief interpretation of each answer. The comparative figures for 2019 are given in brackets. Express answers to the ratios to wo decimal places. 3.1 Profit margin (2019: 8.60%) (2 marks) 3.2 Debtors collection period (2019: 70.34 days) (3 marks) 3.3 Current ratio (2019: 1.45:1) (3 marks) 3.4 Debt to assets (2019: 54.78%) (3 marks) 3.5 Retum on equity (2019: 19.97%) (3 marks) 3.6 Eamings per share (2019: 62.31 cents) (3 marks) 3.7 Acid test ratio (2019: 1.16:1) (3 marks) INFORMATION Extracts of the financial statements of Oak Limited for 2019 and 2020 are provided below. Oak Limited STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2020 R Sales (90% on credit) 1 254 000 Cost of sales 657 000 366 000 Operating expenses: Operating profit Profit after tax 231 000 156 000 STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER: 2020 2019 R R 609 000 555 000 150 000 171 000 216 000 237 000 93 000 87 000 Non-current assets Inventories Accounts receivable Cash and cash equivalents Ordinary share capital (150 000 shares issued) Retained earings Non-current liabilities Accounts payable Other current abilities 300 000 300 000 168 000 189 000 240 000 81 000 282 000 75 000 210 000 273 000