45 days 6 2 8 9 Question 7 - Performance Measurement (15 marks) The following selected ratios are available for Lockers Ltd. for the three most recent years: 2020 2019 2018 Asset turnover 1.4 times 1.4 times 1.8 times 4 Average collection period 38 days 31 days Current ratio 2.5:1 2.2.1 1.5:1 Days in inventory 115 days 100 days 93 days Debt to total assets 65.1% 54.8% 45.2% Dividend yield 1.4% 1.4% 1.3% Return on assets 5.4% 5.8% 6.0% 20 Retum on equity 8.996 9.39 10.796 1 Times interest eamed 2.8 times 3.9 times 5.2 times 22 Price-camnings ratio 12.6 times 20.5 times 27.5 times 4 Note: For questions a) to d), make sure you provide detailed explanation over the three-year period. You will get few marks if you state only an increase or decrease in the ratios as your answers to the questions 26 27 Instructions 28 a) (2.5 marks), Customers are given 30 day-grace period to pay for goods upon receipt of the goods. Assess the effectiveness of the company's credit and 29 collection policies using relevant ratio). 30 137 138 139 ) (S marks). Using relevant ratios, discuss whether you as a long-term lender will be willing to lend money to the company and why or why not. 140 141 142 143 144 145 146 147 148 | 149 ) (5 marks). Using relevant ratios, discuss why you would or would not want to invest in the shares of the company 150 151