4.5 Production overheads budget QUESTIONS (15 marks) (18 minutes) Motlalepula Limited financial statements for the years ended 31 December 2018 and 2019 are as follows: Motlalepula Limited Statement of profit or loss and other comprehensive income 2018 2019 20 Revenue Cast of sales Gross pront Administrative expenses Distribution costs Operating pront Interest paid Profit before tax Income tax expense Net profit for the period 1 300 000 1650 000 650 000 (100 000) 50 000) 500 000 155 000 445 000 (133 500 311 500 1 450 000 750 000 700 000 (150 000) (100 000 450000 75 000 375 000 112 500) 262 500 MAC 1501/102 Motlalepula Limited Statement of financial position 2019 2018 RR ASSETS Non-current assets Property, plant and equipment Current assets Inventories Trade receivables Cash and cash equivalents Total assets 2470 000 2100 500 13800001690000 500 000 450 000 650 000 800 000 239000 240 000 303000020 500 2017 1 500 000 220 000 1720 000 1 000 000 190 500 1 190 500 EQUITY AND LIABILITIES Issued capital Accumulated profits Capital and reserves Non-current liabilities Long term loans Current liabilities Trade payables Short-term interest-bearing) borrowings Current portion of non-current liabilities Total equity and liabilities 1 200 000 930.000 300 000 250 000 380 000 3 850 000 1500 000 900.000 250 000 350 000 300 000 3590 500 years ended REQUIRED 5.1 Use the above information to calculate the following ratios for the 31 December 2019 and 2018 respectively 5.1.1 Operating profit margin 5.1.2 Return on assets 5.1.3 Current ratio 5.1.4 Quick ratio 5.1.5 Debt ratio 5.2 Comment on the liquidity of the company 5.3 Briefly discuss the limitations of ratio analyses. E82SBARE