QUESTION $2$

$(20$ Marks$)$

REQUIRED

$2\mathrm{.}1$

Use the information provided below to calculate the ratios for $2022($expressed to two decimal places$)$ that would reflect each of the following. Note: Use the formulas provided in the formula sheet only $($that appear after QUESTION $5).$

$2\mathrm{.}1\mathrm{.}1$

The efficiency with which the company can produce and sell its products before extraneous costs are deducted.

$(2$ marks$)$

$2\mathrm{.}1\mathrm{.}2$

The amount of time taken by the company to pay its trade debts.

$(2$ marks$)$

$2\mathrm{.}1\mathrm{.}3$

A measurement of the ability of management to use the company$$s net assets to generate sales revenue.

$(2$ marks$)$

$2\mathrm{.}1\mathrm{.}4$

The amount of profit that the company generates in relation to its equity and borrowed capital.

$(2$ marks$)$

$2\mathrm{.}1\mathrm{.}5$

The portion of the company's profit that is allocated to each outstanding ordinary share.

$(2$ marks$)$

$2\mathrm{.}1\mathrm{.}6$

The percentage of the profit that has been put back into the company.

$(2$ marks$)$

$2\mathrm{.}2$

Comment on the following ratios by stating TWO $(2)$ significant points in each case:

$2022$

$2021$

$2\mathrm{.}2\mathrm{.}1$

Profit margin $($Net profit margin$)$

$10\mathrm{.}27\%$

$7\mathrm{.}85\%$

$(2$ marks$)$

$2\mathrm{.}2\mathrm{.}2$

Price earnings ratio

$7\mathrm{.}25$ times

$5\mathrm{.}32$ times

$(2$ marks$)$

$2\mathrm{.}2\mathrm{.}3$

Return on assets

$42\mathrm{.}86\%$

$33\mathrm{.}25\%$

$(2$ marks$)$

$2\mathrm{.}2\mathrm{.}4$

Debt to assets

$46\mathrm{.}43\%$

$55\mathrm{.}67\%$

$(2$ marks$)$