Question: Question 2 Using the ratios calculated, comment on the performance of total tools with reapect to i.liquidity ii.profitability Total Tools operates a hardware business. The

Question 2

Using the ratios calculated, comment on the performance of total tools with reapect to

i.liquidity

ii.profitability

Total Tools operates a hardware business. The following Income Sustement and related information are available for the financial year ended December 31, 2018 TOEAL TOOLS IMALANCE SHEET 8000 3000) Predam 100 Accounts payi Anda Tolonentes Long-term de onde To Cara ck $10 por Pada Pewned angs Total d u Total b ad guy 11 TOTAL TOOLS PERFORMANCE Toale ta Tool operating expenses Faris before (EBIT) Interest bends Toolitus Fare s (EBIT) Taxes (A ) Net ne TOTAL TOOLS Other information Dudendo con look Earnings and in the firm (0) Share outstanding Market price per share 1 Industry Norm Current Acades Average collection period Accounts recebe umove 7 Operating comelum on investme Gross pro margin Operating profit margin Metro Tom over 9 Times interesteamed eum on guy 175 En persone Required: 1. Calculate each ratio for Total Tools comparative to those listed in the industry norm. (16 marks) 2. Using the ratios calculated above, comment on the performance of Total Tools with respect to its i. Liquidity (10 marks) ii. Profitability (10 marks)

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