Answer all the questions

QUESTION THREE Fit Co and Sporty Co both operate in the sportswear sector. Extracts from the draft financial statements for the companes for the year ended 31 December 2020 are as follows: Draft statement of profit or loss for the year ended 31 December 2020: Fit CoSporty Co Revenue250,000220,000 Cost of Sales(190,000)(150,000) Gross profit60,00070,000 Profit on dsposal5,000 Operating expenses(40,000)(38,000) Profit from operations25,00032,000 Finance costs(7,500)(1,000) Profit tax17,50031,000 The draft, summarised statements of financial position of the two companies at 31 December 2020are shown below: FitCoSporty Co ASSETS Non-current assets Property plant andequipment455,80044,700

Investments55,000 Total Non-Current Assets510,80044,700 Current assets Inventory22,00016,000 Trade receivables35,3009,000 Bank2,8001,500 Total Current Assets60,10026,500 Total assets570,90071,200 Equity and liabilities Equity Equity shares ofk1 each202,50025,000 Retaned earnngs286,60028,600 Total Equity489,10053,600 Current liablities Trade Payables81,80017,600 Total equity and liabilities570,90071,200 REQUIRED: .Caculate the following ratos for Fit Co and Sporty Co a. Gross Profit %(1 mark) b. Net Profit %(1 mark) c. Debtor days(1 mark) d. Creditor days(1 mark) e. Current ratio(1 mark) f. Acid test ratio(1 mark) g. Total Debt to equty ratio(1 mark)