Alpha Ltd

Income Statement for the years ended $30$ June

Dividends were paid on ordinary shares of $65,000$ and $75,000$ for $2019$ and $2020,$

respectively.

Required:

$($a$)$ Calculate, for both $2019$ and $2020($using year$-$end figures, i$.$e$.$ not averages, for

Statement of Financial Position items$),$ the following ratios:

Return on equity

Gross profit margin

Operating profit margin

Current ratio

Acid test ratio $($i$.$e$.$ quick ratio$)$

Net asset turnover

Gearing ratio

$(7$ marks$)$

$($b$)$ Using the ratios calculated in $($a$),$ comment on the business's performance.

$(13$ marks$)$

Total $20$ marks