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. $(6$ marks$)$

$2\mathrm{.}2$ Comment on the efficiency of the company regarding the collections from credit sales. Motivate your answer by using a suitable ratio.

$(4$ marks$)$

$2\mathrm{.}3$ 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. $(4$ marks$)$

$2\mathrm{.}4$ Comment on the return that the company made on its own and borrowed capital. Support your answer with the use of a relevant ratio.

$(4$ marks$)$

$2\mathrm{.}5$ Calculate the price earnings ratio. $(3$ marks$)$

$2\mathrm{.}6$ Was any provision made by the company to fund its future growth? Motivate your answer by using an appropriate ratio. $(4$ marks$)$