(4 marks) 3) Calculate and interpret (in the context of these given financial statements) each of the following ratios for both 2019 and 2020 as reflected in the table below. Put your answers (CALCULATED) in the table below: a. Show all your work and formulars (every step) b. When interpreting, define the purpose of each ratio C. What are the result telling you about the company, Siyazama Ltd? marks) Ratio analysis (15 2019 2020 Industry 1.2 2.9 1.2 Liquidity ratios Current ratio Acid-test ratio Asset-management or activity ratios Inventory turnover ratio Average collection period (days) Average payment period (days) Fixed asset turnover Total asset turnover Financial-leverage ratios Total debt to total assets (%) Debt to equity (%) Interest coverage Fixed charge coverage Profitability ratios Gross margin on sales (%) Profit margin on sales (9) Return on assets (5) Return on equity (95) 9.3 38 90 3.1 1.9 40.5 110.2 5.7 4.9 13.6 4.6 8.7 14.9 SIYAZAMA LTD INCOME STATEMENT 22 mm) Xof Sales xof Sales Sales Operating costs Earnings before interest and tax (EBIT) Interest pald Earnings before tax (EBT) Tax Net profit after tax Dividends to preferred shareholders Net income attributable to ordinary shareholders Dividend to ordinary shareholders Addition to retained earnings 2019 R000 81000 73818 7182 1 782 5400 1620 3780 270 3510 2020 RIDO 76 950 69 822 7128 1 269 SR99 1 758 4 101 270 3831 2021 Forecast R000 101 250 92 239 9011 2 160 6151 2055 4 796 270 4526 2 100 1410 2 000 1831 27115 1810 SIYAZAMA LTD BALANCE SHEET 12 marks) % of sales 2019 R000 % of assets 2020 R 000 Assets Fixed assets Plant and equipment Current assets Cash Marketable securities Accounts receivable Inventories Total Assets 35 100 35 100 19 770 2220 wa 9 450 8 100 54870 28 890 28 890 16 470 1485 675 8505 5805 45 360 Capital and liabilities Ordinary shareholder equity Ordinary shares Share premium Retained warnings Preferred shares Total shareholder equity 22 470 1350 2430 18 690 2700 25 170 21 060 1 350 2430 17 280 2 700 23 760 Long-term liabilities Long term cars Debentures Current liabilities Acedunts payable Notes able Adam Artruda Total liabilities Total capital and liabilities 21 600 13 500 100 8 100 1620 2700 20 15 660 14040 1620 5940 210 1620 270 1200 21 600 5 GO 29 700 54320 Study the Two Financial Statements above and answer the following questions: 1) What is the purpose of Ratio analysis 1 (16 marks) 2) You are required to complete both tables a. % of sales, and b. % of assets (4 marks) 3) Calculate and interpret (in the context of these given financial statements) each of the following ratios for both 2019 and 2020 as reflected in the table below. Put your answers (CALCULATED) in the table below: a. Show all your work and formulars (every step) b. When interpreting, define the purpose of each ratio c. What are the result telling you about the company, Siyazama Ltd? marks) Ratio analysis (15 2019 2020 Industry 1.2 2.9 1.2. 9.3 38 90 3.1 1.9 Liquidity ratios Current ratio Acid-test ratio Asset-management or activity ratios Inventory turnover ratio Average collection period (days) Average payment period (days) Fixed asset turnover Total asset turnover Financial-leverage ratios Total debt to total assets (%) Debt to equity (%) Interest coverage Fixed charge coverage Profitability ratios Gross margin on sales (%) Profit margin on sales (9) Return on assets (%) Return on equity (%) 40.5 110.2 5.7 4.9 13.6 46 8.7 14.9
