1.2

1.2. You are a business journalist reporting on the financial performance of companies. In a recent interview with the CEO of an engineering company, the CEO stated that the company is performing very well at present and because it is using the most modern engineering technology while at the same time keeping its inventory levels low. The CEO stated that the use of state-of-the-art technology coupled with low inventory levels will soon result in the company achieving high profit levels. The CEO presented the following ratio analysis to support his statements: 2017 2018 2019 2020 Current ratio 1.30 1.70 1.90 2.10 Quick ratio 1.20 0.80 0.50 0.40 Required: Do you agree with the CEO's statement about profits? Use the information provided in the table to explain your answer. (14) 1.3. The information below was taken from a financial ratio analysis prepared by Canned Foods Ltd to assess its financial performance for 2019. Sales revenue R50 000 000 Gross profit margin 65%