Question $1(30$ marks$)$

The following information has been extracted from Glam & Glow Ltd$,$ a company that specialises in the production of health and cosmetics$.$

Glam & Glow Ltd Statement of profit or loss for the year ending $31$ December $2023$

N$ $000$

N$ $000$

Sales

$1845$

Cost of sales

$(758)$

Gross profit

$1087$

Distribution costs

$(136)$

Administrative costs

$(61)$

$(197)$

Profit from operations

$890$

Finance cost $($interest$)$

$(104)$

$786$

Income tax expense

$(69)$

Profit for the period

$717$

Glam & Glow Ltd Statement of financial position as at $31$ December $2023$

N$ $000$

N$ $000$

Assets

Noncurrent assets

Property, plant and equipment

$4002$

Current assets

$335$

Inventories

$42$

Trade receivables

$180$

Cash and cash equivalents

$113$

Total assets

$4337$

Equity and Liabilities

Equity

Issued share capital $($N$ $1$ shares$)$

$600$

Retained earnings

$1132$

$1732$

Liabilities

Noncurrent liabilities

Interest bearing borrowings

$2313$

Current liabilities

$292$

Total Equity and Liabilities

$4337$

The following information is also available:

$1.$

The market price of one share of Glam & Glow Ltd was N$$10\mathrm{.}22$ at $31$ December $2023.$

$2.$

All sales are made on credit.

$3.$

Purchases made on credit during the year were N$$527000$ and trade payables at $31$ December $2023$ were N$$61000.$

$4.$

The dividend for the year was N$$400000.$

Requirement:

i$.$

From the information above, calculate:

a$)$

The gross profit margin $(2$ marks$)$

b$)$

The operating profit margin $(2$ marks$)$

c$)$

Net profit margin $(2$ marks$)$

d$)$

Asset turnover $(2$ marks$)$

e$)$

Return on capital employed $(2$ marks$)$

f$)$

Current ratio $(2$ marks$)$

g$)$

Quick ratio $(2$ marks$)$

h$)$

Trade receivables days $(2$ marks$)$

i$)$

Trade payables days $(2$ marks$)$

j$)$

Inventory turnover days $(2$ marks$)$

ii$.$

Analyze the performance of the company by commenting on the above ratios. $(10$ marks$)$