4.1	Use the information provided below to calculate the following ratios for the financial year ended 31 December 2019. (Where applicable, express answers to two decimal places.)
4.1.1	Gross margin
4.1.2	Current ratio
4.1.3	Return on equity
4.1.4	Inventory turnover
4.1.5	Debt to assets
4.1.6	Earnings per share
4.1.7	Debtors collection period

2. Comment on the following ratios that have been calculated for Mersat Limited. Provide two significant comments for each.

Ratio	2019	2018
Return on assets	23.15%	20.25%
Creditors payment period	68.32 days	59.56 days
Acid test ratio	2.36:1	0.87:1

(2 marks)

2. (2 marks)
3. (2 marks)

INFORMATION

Excerpts of the financial data of Mersat Limited for 2019 are as follows:

STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2019
	R
Sales	6 600 000
Cost of sales	4 614 000
Operating profit	1 446 000
Interest expense	240 000
Profit before tax	1 206 000
Profit after tax	868 320

STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2019
	R
ASSETS
Non-current assets	3 840 000
Inventories	342 000
Accounts receivable	1 440 000
Cash	624 000
	6 246 000
EQUITY AND LIABILITIES
Ordinary share capital	600 000
Retained earnings	516 000
Long-term loan	4 254 000
Accounts payable	876 000
	6 246 000

Additional information
1.	Inventories on 31 December 2018 amounted to R276 000.
2.	All purchases and sales of inventory are on credit.
3.	250 000 ordinary shares have been issued by the company.
4.	The credit terms offered by suppliers are 60 days.