Use the following information to answer question 15 17 Kiwi Limited manufactures and sells kiwiana items to retail outlets throughout New Zealand Kiwi Limited was listed on the New Zealand Stock Exchange in late 2018 The following data has been calculated from its financial statements 2018 2019 Industry Average (2019) Gross Profit Margin 31 33 35 Net Profit Margin 8 9 8 Return on Assets 12 11 12 Current Ratio 2 1x 2 4x 2 times Quick Ratio 1 0x 0 8x 1 1 times Days debtors (days) 49 43 46 Days inventory (days) 75 days 95 days 60 days Gearing Ratio 25 15 50 Interest coverage ratio 6x 8x 4 times a Explain what is causing the Return on Assets of Kiwi Ltd to decline compared to the previous year and the industry average (Word limit maximum of 70 words) b Which ratio from the Kiwi Limited information focus on liquidity (short term survival) c What is the most likely reason that the current ratio is increasing while the quick ratio is decreasing Explain your answer (Word limit maximum of 130 words)

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Question: Use the following information to answer question 15 - 17 Kiwi Limited. manufactures and sells kiwiana items to retail outlets throughout New Zealand. Kiwi Limited

Use the following information to answer question 15 - 17

Kiwi Limited. manufactures and sells kiwiana items to retail outlets throughout New Zealand. Kiwi Limited was listed on the New Zealand Stock Exchange in late 2018. The following data has been calculated from its financial statements.

	2018	2019	Industry Average (2019)
Gross Profit Margin	31%	33%	35%
Net Profit Margin	8%	9%	8%
Return on Assets	12%	11%	12%

Current Ratio	2.1x	2.4x	2 times
Quick Ratio	1.0x	0.8x	1.1 times
Days debtors (days)	49	43	46
Days inventory (days)	75 days	95 days	60 days
Gearing Ratio	25%	15%	50%
Interest coverage ratio	6x	8x	4 times

a. Explain what is causing the Return on Assets of Kiwi Ltd. to decline compared to the previous year and the industry average. (Word limit: maximum of 70 words)

b. Which ratio from the "Kiwi Limited. information" focus on liquidity (short term survival)?

c. What is the most likely reason that the current ratio is increasing while the quick ratio is decreasing? Explain your answer. (Word limit: maximum of 130 words)

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