QUESTION 2 (25 MARKS)

You have been given the following figures from the financial statements of Bulldozer Builders:-

Accounts Payable: R 29 150

Accounts Receivable: R 296 111

Annual Sales: R 5 330 000

Cost of Sales: R 2 660 000

Current Assets: R 750 000

Current Liabilities: R 310 000

Earnings: R 443 000

Inventory: R 533 000

Long Term Assets: R 430 000

Number of shares: 49 961

Total Liabilities: R 1 000 000

Required:

Calculate the following ratios from (a) to (j). Use 365-day basis and assume cost of sales for credit purchases where applicable.

a) Current Ratio (2)

b) Quick Ratio (2)

c) Inventory Turnover (2)

d) Debtor Collection Period (2)

e) Creditors Payment Period (2)

f) Total Asset Turnover (2)

g) Debt Ratio (2)

h) Gross Profit (2)

i) Net Profit (2)

j) Earnings per share (2)

k) Comment on the liquidity ratio of Bulldozer Builders. (5)