QUESTION $2$

$(25$ MARKS$)$

REQUIRED

Use the relevant information provided in the case study to answer the following questions $($with ratios

expressed to two decimal places$)$ in respect of $2023.$

Note: Use the formulas provided in the formula sheet only $($that appear after QUESTION $4).$

$2\mathrm{.}1$

Comment on the liquidity of the company. Calculate TWO $(2)$ appropriate ratios to

support your answer.

$2\mathrm{.}2$

$2\mathrm{.}3$

$2\mathrm{.}4$

$2\mathrm{.}5$

$2\mathrm{.}6$

Comment on the efficiency of the company regarding the collections from credit sales.

Motivate your answer by using a suitable ratio.

Did the company make good use of the credit period allowed by the suppliers? Motivate

your answer with a relevant ratio and offer a recommendation, if necessary.

Comment on the return that the company made on its own and borrowed capital. Support

your answer with the use of a relevant ratio.

Calculate the price earnings ratio.

Was any provision made by the company to fund its future growth? Motivate your answer

by using an appropriate ratio.

$(6$ marks$)$

$(4$ marks$)$

$(4$ marks$)$

$(4$ marks$)$

$(3$ marks$)$

$(4$ marks$)$