Below are the financial statements for the year ended 31 December 2021 for Purple Enterprise.

Statement of Profit or Loss and Other Comprehensive Income

for the year ended 31^st December 2021

	2021 RM	2020 RM
Sales Revenue	445,000	300,000
Less: Cost of Goods Sold	(280,000)	(120,000)
Gross Profit	165,000	180,000
Add: Other Income	25,000	20,000
Less: Expenses:
Operating expenses	(90,000)	(60,000)
Administrative costs	(20,000)	(36,000)
Profit for the year	80,000	84,000

Statement of Financial Position as at 31^st December 2021

	2020 RM	2019 RM
Non-current Assets	228,000	99,000
Current Assets
Inventories	40,000	45,000
Accounts Receivable	57,000	40,000
Bank	26,000	3,000
Cash	20,000	6,000
Total assets	371,000	193,000
Owners Equities
Capital	100,000	50,000
Retained Profit	94,000	10,000
Profit for the year	80,000	84,000
	274,000	144,000
Current Liabilities
Accounts Payable	50,000	34,000
Accruals	12,000	15,000
Short term loan	35,000	-
Total Equities and Liabilities	371,000	193,000

Required:

(a) Calculate the following ratios for both financial years.

i. Gross profit margin

(2 marks)

ii. Net profit margin

(2 marks)

iii. Inventory turnover ratio

(2 marks)

iv. Current ratio

(2 marks)

v. Quick ratio or Acid-test ratio

(2 marks)

vi. Average Collection Period

(2 marks)

(b) Provide comments on the results of the ratios for both financial years.

(10 marks)

Note: Show all relevant workings

[22 marks]