2020 2019

Sales 50% credit 2 200 000.00

Cost of Sales (80% of goods purchased on credit1 200 000.00

Net Income after tax 240 000.00

Tangible assets 1 500 000.001 470 000.00 Inventory 200 000.00 300 000.00 Receivables 100 000.00 220 000.00 Cash 50 000.00 620 000.00

Payables 250 000.00 410 000.00

Loans @9% p.a 210 000.00 65 000.00

Share capital (500000 ordinary shares @ R2 each 1 000 000.00 100 000.00

Retained Income 250 000.00 230 000.00

Share Premium 140 000.00 140 000.00

Shares are currently trading at R4.10 per share

Calculate:

3.1 The debtors average collection period and comment (last year was 37 days) Note Debtors are given 30 days to pay

3.2 the creditors payment period and comment (last year was 88 days, all creditors accounts are 90 days less 2%

3.3 The price to earnings ratio for 2020 and explain the significance to decision makers.

3.4 the debt ratio and explain significance to decision makers