Use the information provided in QUESTION $1$ to answer the following questions for the financial year ended

$31$ December $2023.$

Note:

$$ Use the formulas provided in the formula sheet only

$$ Answers to the ratios must be expressed to two decimal places.

$2\mathrm{.}1$ Comment on the management of debtors and creditors after calculating the relevant

ratios.

$2\mathrm{.}2$ Determine the percentage of the profit after tax that has been retained by the company.

$2\mathrm{.}3$ Calculate the return on capital employed and comment on your answer.

$2\mathrm{.}4$ Would prospective lenders be concerned about the relative proportion of borrowed

capital and

$2\mathrm{.}5$ Calculate the ratio that measures the efficiency with which the non$-$current and current current assets of company were managed.

$2\mathrm{.}6$ Comment on the ability of the company to settle its short$-$term debts under distress

conditions. Use a relevant ratio to motivate your answer.

FORMULA SHEET

The following information was obtained from the financial records of Fiona Limited:

Fiona Limited

Statement of Comprehensive Income for the year ended $31$ December:

$2023($R$)2022($R$)$

Sales $1900000018000000$

Cost of sales $(10000000)(9800000)$

Gross profit $90000008200000$

Operating expenses $(5500000)(5200000)$

Operating profit $35000003000000$

Interest expense $(240000)(360000)$

Profit before tax $32600002640000$

Company tax $(880200)(739200)$

Profit after tax $23798001900800$

Fiona Limited

Statement of Financial Position as at $31$ December:

$2023($R$)2022($R$)$

ASSETS

Non$-$current assets $25000003000000$

Property, plant and equipment $25000003000000$

Current assets $1950000013600000$

Inventories $120000008000000$

Accounts receivable $65000003600000$

Cash $10000002000000$

Total assets $2200000016600000$

EQUITY AND LIABILITIES

Equity $1600000010600000$

Ordinary share capital $120000008000000$

Retained earnings $40000002600000$

Non$-$current liabilities $20000003000000$

Long$-$term loan $(12\%)20000003000000$

Current liabilities $40000003000000$

Accounts payable $34440002616000$

Dividends payable $556000384000$

Total equity and liabilities $2200000016600000$

Additional information

$1.$ All purchases and sales of inventories are on credit.

$2.$ Depreciation for the year ended $31$ December $2023$ amounted to R$500000.$

$3.$ Interim dividends paid out during the financial year ended $31$ December $2023$ amounted to R$423800.$

$4.$ Credit terms to debtors are $30$ days and credit terms from suppliers are $60$ days