QUESTION 5 (20 Marks) REQUIRED Calculate the following ratios for 2023 (expressed to two decimal places)...
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QUESTION 5 (20 Marks) REQUIRED Calculate the following ratios for 2023 (expressed to two decimal places) and in each case state whether there has been an improvement or deterioration in the ratio. The ratios for 2022 are provided in brackets. Note: Use formulas provided in the formula sheet only (that appear after QUESTION 5). 5.1 Gross profit margin (2022: 34.53%) (3 marks) 5.2 Trade receivables average number of days (2022: 59.43 days) (3 marks) 5.3 Return on capital employed (2022: 24.32%) (3 marks) 5.4 Current ratio (2022: 2.25:1) (3 marks) 5.5 Acid test ratio (2022: 1.32:1) (3 marks) 5.6 Debt to equity (2022: 92.63%) (2 marks) 5.7 Inventory average number of days (2022: 129.67 days) (3 marks) INFORMATION Extracts of the financial statements of Pineware Limited for 2022 and 2023 are provided below. PINEWARE LIMITED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2023 Sales (90% on credit) Cost of sales Operating profit/Profit before interest and taxation Profit after tax R 1 250 000 650 000 230 000 160 000 STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER: 2023 2022 R R Non-current assets 610 000 550 000 Inventories 170 000 150 000 Trade receivables 213 000 245 000 Cash and cash equivalents 90 000 90 000 Ordinary share capital (150 000 shares issued) 300 000 300 000 Accumulated profit 190 000 170 000 Non-current liabilities 250 000 280 000 Trade payables Other current liabilities 80 000 70 000 263 000 215 000 QUESTION 5 (20 Marks) REQUIRED Calculate the following ratios for 2023 (expressed to two decimal places) and in each case state whether there has been an improvement or deterioration in the ratio. The ratios for 2022 are provided in brackets. Note: Use formulas provided in the formula sheet only (that appear after QUESTION 5). 5.1 Gross profit margin (2022: 34.53%) (3 marks) 5.2 Trade receivables average number of days (2022: 59.43 days) (3 marks) 5.3 Return on capital employed (2022: 24.32%) (3 marks) 5.4 Current ratio (2022: 2.25:1) (3 marks) 5.5 Acid test ratio (2022: 1.32:1) (3 marks) 5.6 Debt to equity (2022: 92.63%) (2 marks) 5.7 Inventory average number of days (2022: 129.67 days) (3 marks) INFORMATION Extracts of the financial statements of Pineware Limited for 2022 and 2023 are provided below. PINEWARE LIMITED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2023 Sales (90% on credit) Cost of sales Operating profit/Profit before interest and taxation Profit after tax R 1 250 000 650 000 230 000 160 000 STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER: 2023 2022 R R Non-current assets 610 000 550 000 Inventories 170 000 150 000 Trade receivables 213 000 245 000 Cash and cash equivalents 90 000 90 000 Ordinary share capital (150 000 shares issued) 300 000 300 000 Accumulated profit 190 000 170 000 Non-current liabilities 250 000 280 000 Trade payables Other current liabilities 80 000 70 000 263 000 215 000
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51 Gross Profit Margin Gross Profit Margin 2023 1250000 650000 1250000 x 100 4240 Comparison There i... View the full answer
Related Book For
Intermediate Accounting Volume 2
ISBN: 9781119740445
13th Canadian Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy
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