Question: QUESTION 2 ( 2 0 MARKS ) REQUIRED Use the relevant information provided below to answer the following questions ( with ratios expressed to two

QUESTION 2(20 MARKS) REQUIRED Use the relevant information provided below to answer the following questions (with ratios expressed to two decimal places and fully stated e.g.2.45:1; 34.67%): Note: Use the formulas provided in the formula sheet only that appear after QUESTION 5.2.1 Is the company generating a satisfactory return on its own and borrowed capital? Motivate your answer with the use of a relevant ratio. (3 marks)2.2 Will the suppliers of borrowed funds have any concerns related to the risk and debt exposure of the company? Calculate TWO (2) appropriate ratios to support your answer. (6 marks)2.3 Would the shareholders be satisfied with the return on their investments? Motivate your answer with the relevant calculations. (3 marks)2.4 Calculate TWO (2) appropriate ratios related to the ability of the company to honour its short-term obligations and comment on your answers. (6 marks)2.5 What percentage of the profit after tax has been retained by the company? (2 marks) INFORMATION Excerpts of financial statements of Beacon Limited for 2024 are as follows: Beacon Limited Statement of Comprehensive Income for the year ended 31 December 2024 R Sales (all credit)18000000 Cost of sales (15000000) Gross profit 3000000 Operating expenses (2100000) Operating profit 900000 Interest expense (360000) Profit before tax 540000 Company tax (145800) Profit after tax 394200 Statement of Changes in Equity the year ended 31 December 2024 R Dividends paid 118260 Statement of Financial Position as at 31 December 2024 R Assets Non-current assets 1700000 Inventory 4000000 Accounts receivable 1900000 Cash 3000007900000 Equity and liabilities Ordinary share capital 2200000 Retained earnings 1100000 Long-term loan (18%)2000000 Accounts payable 900000 Other current liabilities 17000007900000

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