QUESTION 4 (20 Marks) REQUIRED 4.1 Use the information provided below to calculate the following ratios for the financial year ended 31 December 2019. (Where applicable, express answers to two decimal places.) 4.1.1 Gross margin (2 marks) 4.1.2 Current ratio (2 marks) 4.1.3 Return on equity (2 marks) 4.1.4 Inventory turnover (2 marks) 4.1.5 Debt to assets (2 marks) (2 marks) 4.1.6 Earnings per share 4.1.7 Debtors collection period (2 marks) 4.2 Comment on the following ratios that have been calculated for Mersat Limited. Provide two significant comments for each Ratio 2019 2018 4.2.1 Return on assets 23.15% 20.25% (2 marks) 4.2.2 Creditors payment period 68.32 days 59.56 days (2 marks) 4.2.3 Acid test ratio 2.36:1 0.87:1 (2 marks) INFORMATION Excerpts of the financial data of Mersat Limited for 2019 are as follows: STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2019 Sales Cost of sales Operating profit Interest expense Profit before tax Profit after tax R 6 600 000 4 614 000 1 446 000 240 000 1 206 000 868 320 QUESTION 4 (20 Marks) REQUIRED 4.1 Use the information provided below to calculate the following ratios for the financial year ended 31 December 2019. (Where applicable, express answers to two decimal places.) 4.1.1 Gross margin (2 marks) 4.1.2 Current ratio (2 marks) 4.1.3 Return on equity (2 marks) 4.1.4 Inventory turnover (2 marks) 4.1.5 Debt to assets (2 marks) (2 marks) 4.1.6 Earnings per share 4.1.7 Debtors collection period (2 marks) 4.2 Comment on the following ratios that have been calculated for Mersat Limited. Provide two significant comments for each Ratio 2019 2018 4.2.1 Return on assets 23.15% 20.25% (2 marks) 4.2.2 Creditors payment period 68.32 days 59.56 days (2 marks) 4.2.3 Acid test ratio 2.36:1 0.87:1 (2 marks) INFORMATION Excerpts of the financial data of Mersat Limited for 2019 are as follows: STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2019 Sales Cost of sales Operating profit Interest expense Profit before tax Profit after tax R 6 600 000 4 614 000 1 446 000 240 000 1 206 000 868 320