Additional information:

Total equity as at 30 June 2019 is $5,185,000

Inventory as at 30 June 2019 is $915,000

Accounts receivable as at 30 June 2019 is $955,000

Zenex Limited manufactures and sells two types of bikes Road bikes and Mountain bikes. The financial accountant of Zenex Limited has prepared the financial statements for the 2021 financial year. Use the financial information provided to:

Q1) a)Calculate the profitability and efficiency ratios for 2021 and 2020.

b)Compare the financial ratios between 2021 and 2020. Explain the changes in each profitability and efficiency ratio (the meaning of the changes and the reason for the changes).

c). Provide a conclusion on the overall profitability and efficiency of the company.

d)Calculate the following profitability ratios ensuring that you show your workings (show answer with 2 decimal places in terms of %,

Show Workings

Financial Ratios	2021	2020	Increase/Decrease
Return on assets (ROA)
Return on equity (ROE)
Profit margin	= 5400 / 4,350 x 100% =124.13	= Profit / Sales x 100%
Gross profit margin

e) Discuss the changes in ROA

f)Discuss the changes in profit margin

g) Discuss the changes in gross profit margin

h) Provide an overall discussion on profitability of the company (based on all the profitability ratios)

Zenex Limited Income Statement for the year ending 30 June Zenex Limited Income Statement for the year ending 30 June