3.1 Use the information provided below to calculate the following ratios for 2021 (expressed to two...

 

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3.1 Use the information provided below to calculate the following ratios for 2021 (expressed to two decimal places). 3.1.1 Gross margin 3.1.2 Debtor collection period 3.1.3 Inventory turnover 3.1.4 3.1.5 3.1.6 3.1.7 Return on equity 3.2.2 Debt to equity Current ratio Dividend per share 3.2 Comment briefly but meaningfully on the following ratios that have been calculated.: 3.2.1 Acid test ratio Profit margin (Net profit margin) 3.2.3 Creditors payment period (2 marks) (2 marks) (2 marks) (2 marks) (2 marks) (2 marks) (2 marks) (2 marks) (2 marks) (2 marks) INFORMATION Excerpts of the financial data of Hampshire Limited for 2021 are as follows: Sales Cost of sales Operating profit Interest expense Profit before tax Company tax Non-current assets Inventories Accounts receivable Cash Equity Long-term loan Accounts payable Dividends payable R 18 000 000 12 000 000 2 800 000 200 000 2 600 000 780 000 3 000 000 1 400 000 1 000 000 600 000 3 600 000 1 400 000 600 000 400 000 Additional information 1. 2. 3. 4. 5. 6. 7. Inventories amounted to R1 200 000 on 31 December 2020. Interim dividends paid during 2021 amounted to R560 000. The number of ordinary shares in issue during 2021 was 1 200 000. Credit terms from suppliers are 60 days. Seventy-five percent (75%) of the sales is on credit. All the relevant asset, equity and liability accounts are included above. The following ratios were calculated over the two-year period 2020 and 2021: Acid test ratio Profit margin (Net profit margin) Creditors payment period 2021 1.60:1 10.11% 17.95 days 2020 0.77:1 16.52% 56 days 3.1 Use the information provided below to calculate the following ratios for 2021 (expressed to two decimal places). 3.1.1 Gross margin 3.1.2 Debtor collection period 3.1.3 Inventory turnover 3.1.4 3.1.5 3.1.6 3.1.7 Return on equity 3.2.2 Debt to equity Current ratio Dividend per share 3.2 Comment briefly but meaningfully on the following ratios that have been calculated.: 3.2.1 Acid test ratio Profit margin (Net profit margin) 3.2.3 Creditors payment period (2 marks) (2 marks) (2 marks) (2 marks) (2 marks) (2 marks) (2 marks) (2 marks) (2 marks) (2 marks) INFORMATION Excerpts of the financial data of Hampshire Limited for 2021 are as follows: Sales Cost of sales Operating profit Interest expense Profit before tax Company tax Non-current assets Inventories Accounts receivable Cash Equity Long-term loan Accounts payable Dividends payable R 18 000 000 12 000 000 2 800 000 200 000 2 600 000 780 000 3 000 000 1 400 000 1 000 000 600 000 3 600 000 1 400 000 600 000 400 000 Additional information 1. 2. 3. 4. 5. 6. 7. Inventories amounted to R1 200 000 on 31 December 2020. Interim dividends paid during 2021 amounted to R560 000. The number of ordinary shares in issue during 2021 was 1 200 000. Credit terms from suppliers are 60 days. Seventy-five percent (75%) of the sales is on credit. All the relevant asset, equity and liability accounts are included above. The following ratios were calculated over the two-year period 2020 and 2021: Acid test ratio Profit margin (Net profit margin) Creditors payment period 2021 1.60:1 10.11% 17.95 days 2020 0.77:1 16.52% 56 days

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Calculation of Gross margin debtor collection period Inventory turnover return on equity debt to equity current ratio and dividend per share 32 Explan... View the full answer