QUESTION FOUR $(20$ MARKS$)$

The following information relates to Ex$-$communicado Traders owned by Mr$.$ J$.$ Wick.

$\backslash$table$[[,$R$\text{'}$s$],[$Net Profit,$120000],[$Revenue$,600000],[$Total Assets,$806000],[$Current Liabilities,$150000],[$Current Assets,$250000],[$Inventory$,50000],[$Total liabilities,$500000]]$

$4\mathrm{.}1$ Explain with $2$ reasons why ratio analysis is important for business organizations such as Ex$-$communicado Traders. Calculate the following ratios for the year ending $31$ December $2023,$ and in each case provide commentary expressing what the ratio means to the business. $(4)$

$4\mathrm{.}2\mathrm{.}1$ Net Profit Margin.

$4\mathrm{.}2\mathrm{.}2$ Current Ratio.

$(4)$

$4\mathrm{.}2\mathrm{.}3$ Acid$-$Test Ratio.

$(4)$

$(4)$QUESTION FOUR $(20$ MARKS$)$

The following information relates to Ex$-$communicado Traders owned by Mr$.$ J$.$ Wick.

$\backslash$table$[[,$R$\text{'}$s$],[$Net Profit,$120000],[$Revenue$,600000],[$Total Assets,$806000],[$Current Liabilities,$150000],[$Current Assets,$250000],[$Inventory$,50000],[$Total liabilities,$500000]]$

$4\mathrm{.}1$ Explain with $2$ reasons why ratio analysis is important for business organizations such as Ex$-$communicado Traders. Calculate the following ratios for the year ending $31$ December $2023,$ and in each case provide commentary expressing what the ratio means to the business. $(4)$

$4\mathrm{.}2\mathrm{.}1$ Net Profit Margin.

$4\mathrm{.}2\mathrm{.}2$ Current Ratio.

$(4)$

$4\mathrm{.}2\mathrm{.}3$ Acid$-$Test Ratio.

$(4)$

$(4)$