QUESTION $2$

$(20$ Marks$)$

REQUIRED

Use the information provided below to answer the following questions.

Note: Use formulas provided in the formula sheet only $($that appear after QUESTION $5).$ Answers to the ratios must be expressed to two decimal places.

$2\mathrm{.}1$ Calculate the percentage profit on sales after the cost of sales only have been accounted for. $(2$ marks$)$

$2\mathrm{.}2$ Has the liquidity of the company improved? Use two relevant ratios to motivate your answer. $(6$ marks$)$

$2\mathrm{.}3$ Use the relevant ratios to comment on the effectiveness with which the company has employed the inventory and debtors during $2022.(6$ marks$)$

$2\mathrm{.}4$ Use TWO $(2)$ appropriate ratios that shareholders would use to assess the profitability of the company for $2022$ by examining the after$-$tax returns earned. Comment on your calculations. $(6$ marks$)$

INFORMATION

Extracts of the financial statements of Ultra Limited are presented below:

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