QUESTION ONE $(21$ MARKS$)$

You are the financial manager of XYZ $($Pty$)$ Ltd and have been requested by the board of

directors to prepare and comment on some ratios. The company has a $29/28$ February year

end.

Extracts from the statement of financial position:

$20242023$

Notes R$\text{'}000$ R$\text{'}000$

Inventories $1500300$

Trade and other receivables $450420$

Cash and cash equivalents $65080$

Trade and other payables $325300$

Extracts from the statement of profit or loss

Revenue $230002750$

Cost of sales $320001800$

Notes:

$1.$ Inventory on hand at $28$ February $2022$ was R$150000$

$2.$ Credit sales are $50\%$ of revenue.

$3.$ All purchase of inventory is on credit.

Additional information

$$ Use $365$ days

$$ Do not use averages.

REQUIRED:

Marks

Sub$-$total Total

$1.$ Calculate purchases for the years ended $29$ February $2024$

and $28$ February $20236$

$6$

$2.$ Calculate and comment on the following ratios:

a$)$ Inventory days

b$)$ Debtor$$s collection period

c$)$ Creditors payment period

$5$

$5$

$5$

$15$

TOTAL $21$