QUESTION THREE [25] Netforce Security (Pty) Ltd's Statement of Financial Position for the 2019 and 2018 financial years are below: 2019 2018 R R Assets Non-current assets 7 500 000 6 500 000 Inventory 500 000 300 000 Receivables 450 000 420 000 Cash 650 000 80 000 9 100 000 7 300 000 Equity and Liabilities Share capital (R2 shares) 5 000 000 4 400 000 Share premium 200 000 100 000 Retained income 700 000 400 000 Long term debt 2 500 000 1 500 000 Payables 700 000 900 000 9 100 000 7 300 000 The abbreviated Income Statement for the year ended 28 February 2019: Sales (50% on credit) Cost of Sales Depreciation Interest expense Net Income before Tax Dividends Retained Income Amazon Limited R 3 000 000 2 000 000 210 000 87 000 900 000 330 000 300 000 3.1 Required: Calculate the following ratios for 2019 and comment. Ratios for 2018 are given in brackets. 3.1.1 Current ratio (0,89. 1) (3) 3.1.2 Acid test ration (0,56. 1) (3) 3.1.3 The debtors, collection period (81 days) [all debtors are on 60 day accounts] (4) 3.2 Share capital and equity 3.2.1 Calculate the earnings per share and dividends per share for 2019. (4) 3.22 How many shares were issued in 2019? (2) 3.2.3 Where the shares issued at a premium? If so, what was the premium per share? (2) 3.3 Calculate the market to book ratio. Explain the significance of this ratio. (3) 3.4 Calculate the return on equity using the Du Point Identity/Formula. Will management be happy with this return? 4) QUESTION THREE [25] Netforce Security (Pty) Ltd's Statement of Financial Position for the 2019 and 2018 financial years are below: 2019 2018 R R Assets Non-current assets 7 500 000 6 500 000 Inventory 500 000 300 000 Receivables 450 000 420 000 Cash 650 000 80 000 9 100 000 7 300 000 Equity and Liabilities Share capital (R2 shares) 5 000 000 4 400 000 Share premium 200 000 100 000 Retained income 700 000 400 000 Long term debt 2 500 000 1 500 000 Payables 700 000 900 000 9 100 000 7 300 000 The abbreviated Income Statement for the year ended 28 February 2019: Sales (50% on credit) Cost of Sales Depreciation Interest expense Net Income before Tax Dividends Retained Income Amazon Limited R 3 000 000 2 000 000 210 000 87 000 900 000 330 000 300 000 3.1 Required: Calculate the following ratios for 2019 and comment. Ratios for 2018 are given in brackets. 3.1.1 Current ratio (0,89. 1) (3) 3.1.2 Acid test ration (0,56. 1) (3) 3.1.3 The debtors, collection period (81 days) [all debtors are on 60 day accounts] (4) 3.2 Share capital and equity 3.2.1 Calculate the earnings per share and dividends per share for 2019. (4) 3.22 How many shares were issued in 2019? (2) 3.2.3 Where the shares issued at a premium? If so, what was the premium per share? (2) 3.3 Calculate the market to book ratio. Explain the significance of this ratio. (3) 3.4 Calculate the return on equity using the Du Point Identity/Formula. Will management be happy with this return? 4)