REQUIRED

Use the information provided in Question $4$ to answer the following questions:

$5\mathrm{.}1$ Calculate the following ratios $($expressed to two decimal places$)$ for $2023$ only. Note: Use the

formulas provided in the formula sheet only $($that appear after QUESTION $5).$

$5\mathrm{.}1\mathrm{.}1$ Gross margin $(2$ marks$)$

$5\mathrm{.}1\mathrm{.}2$ Debtor collection period $(2$ marks$)$

$5\mathrm{.}1\mathrm{.}3$ Inventory turnover $(2$ marks$)$

$5\mathrm{.}1\mathrm{.}4$ Earnings per share $(2$ marks$)$

$5\mathrm{.}1\mathrm{.}5$ Current ratio $(2$ marks$)$

$5\mathrm{.}1\mathrm{.}6$ Debt to assets $(2$ marks$)$

$5\mathrm{.}1\mathrm{.}7$ Return on equity $(2$ marks$)$

$5\mathrm{.}2$ Comment on the return on equity calculated above. $($Note: The return on equity

for $2022$ was $18\mathrm{.}12\%.)(4$ marks$)$

$5\mathrm{.}3$ Refer to the appropriate ratio in question $5\mathrm{.}1$ and explain whether the company

will be able to easily pay its short$-$term debts or not. $(2$ marks$)$

END OF PAPER

FORMULA SHEET

Gross profit X $100$

Sales $1$

Profit after tax X $100$

Sales $1$

Operating profit X $100$

Total assets $1$

Profit after tax X $100$

Equity $1$

Current assets

Current liabilities

Current assets $$ Inventory

Current liabilities

Cost of sales

Average inventory

Accounts receivable X $365$

Credit sales $1$

Accounts payable X $365$

Credit purchases $1$

Total debt X $100$

Total assets $1$

Non$-$current debt X $100$

Equity $1$

Operating profit

Interest expense

Profit after tax X $100$

No$.$ of ordinary shares issued $1$

Dividends for the year X $100$

No$.$ of ordinary shares issued $1$

Market price per share

Earnings per share

Earnings per share X $100$

Market price per share $1$

Dividend per share X $100$

Market price per share $1$