1. (a) Construct the DuPont equation for years ended 31 December 2019 and 2018 and explain the

   change in ROE. (6 marks)

2. (b) Calculate the following ratios of TAL for years ended 31 December 2019 and 2018 (calculate to two decimal places): (i) Quick ratio (ii) Current ratio

   (iii) Day sales outstanding (iv) Fixed assets turnover

   (8 marks)

3. (c) Using ratios from part (b) above, comment briefly on TALs liquidity and asset management.

(d) Calculate the dividend per share for year ended 31 December 2019.

(4 marks) (2 marks)

Question 2 (20 marks) Below is the information relating to Travel Accessories Limited (TAL"): Income Statement for the year to 31 December 2019 ($ in thousands) Sales 280,000 Less: Cost of goods sold 160,000 Gross profit 120.000 Less: Depreciation 18.000 Earnings before interest and taxes 102,000 Less: Interest paid 7.200 Earnings before taxes 94,800 Less: Taxes 25,600 Net income 69,200 Additional information: Cash sales for the year ended 31 December 2019 was $7.400,000 Sales, cash sales and net income for year ended 31 December 2018 were $250,000,000. $5,600,000 and $50,800,000 respectively. The number of common stock outstanding during the year is 65,200,000. Cash Accounts receivable Inventory Total current assets Net fixed assets Total assets Balance Sheets as at 31 December ($ in thousands) 2019 2018 46,000 44,000 Accounts payable 88,000 76,000 Long-term debt 64.000 54,000 Common stock 198,000 174,000 Retained earnings 132,000 140.000 330,000 314,000 Total liabilities & equity 2019 62,000 88,000 140,000 40,000 2018 60,000 88,000 130,000 36,000 330,000 314.000