1. Dube Plumbing Ltd's 31 December 2020 statement of financial position showed a debt of R2,8 million and the 31 December 2021 statement of financial position showed a debt of R3,1 million. The 2021 income statement showed an interest expense of R340 000. What was Dube's cash flow to lenders during 2021? [1]

1. R40 000
2. R55 000
3. R60 000
4. R45 000

2. Dube Plumbing Ltd's 31 December 2020 statement of financial position showed R7,62 million in the share capital account. The 31 December 2021 statement of financial position showed R8,455 million in the same account. If the company paid out R700 000 in cash dividends during 2021, what was the cash flow to shareholders for the year? [1]

1. -R145 000
2. -R135 000
3. R700 000
4. R835 000

3. Given the information for Dube Plumbing Ltd in questions 9 and 10, suppose you also know that the firm spent R860 000 in new capital investments during 2021 and that the firm reduced its net working capital investment by R165 000. What was Dube's 2021 operating cash flow?

[1]

1. R635 000
2. R860 000
3. R600 000
4. R800 000

4. A firm has a net working capital of R1 000, current liabilities of R4 460 and inventory of R1 875.

1. What is the current ratio?
2. What is the quick ratio?

1. i. 1.60 ii. 0.75 times
2. i. 1.44 ii. 0.65 times
3. i. 1.02 ii. 0.75 times
4. i. 1.22 ii. 0.80 times

[2]

5. A firm has sales of R29 million, total assets of R37 million, and total debt of R13 million.

1. If the profit margin after tax is 10 per cent, what is net profit?
2. What is ROE?

1. i. 2.4 million ii. 11.00%
2. i. 2.9 million ii. 10.25%
3. i. 2.4 million ii. 7.84%
4. i. 2.9 million ii. 12.08%

[2]

6. A firm has a total debt ratio of 0,35.

1. What is its debt/equity ratio?
2. What is its equity multiplier?

1. i. 0.35 ii. 1.35
2. i. 0.54 ii. 1.54
3. i. 0.75 ii. 1.75
4. i. 0.44 ii. 1.44

[2]

7. If a firm has an equity multiplier of 1,75, a total asset turnover of 1,30, and a profit margin after tax of 11 per cent, what is its ROE?

1. 11.60%
2. 21.50%
3. 25.03%
4. 22.08%

[1]

8. The Debt Equity Ratio is classified as a

1. Liquidity Ratio
2. Solvency Ratio
3. Profitability Ratio.
4. Efficiency ratio [1]

Question 2: True or False questions

	Protecting short-term creditors' interest is long-term solvency of firm.	True	False
	A highly burdened debt firm often experiences difficulty in raising funds by debt or equity.	True	False
	Debt is always riskier from the firm's viewpoint as interest is to be paid whether there are profits or not.	True	False
	A firm need not manage its assets more efficiently to generate more sales.	True	False
	Net Assets Turnover is also called Capital Employed turnover.	True	False