Foschini Holdings : Group statements

Statement of financial position
Assets	2007	2006
	(R million)	(R million)
Property, plant and equipment (PPE) at carrying value	1 936.9	1 810.5
Goodwill
Other intangible assets	350.5	274.3
Investment in associates	35.5	25.0
Deferred tax assets	230.0	294.0
Other long-term assets	883.5	389.3
Non-current assets	3 436.4	2 793.1
Inventories	1 722.7	1 371.4
Trade and other receivables	745.2	697.4
Short-term financial assets	5.8	30.0
Cash and cash equivalents	2 391.1	825.6
Other short-term assets	3.9	3 337.2
Current assets	4 868.7	6 261.6
Total assets	8 305.1	9 054.7

Equity and liabilities
Share capital	1.1	1.1
Reserves	190.1	(356.5)
Retained earnings	2 833.5	3 881.1
Ordinary shareholders' equity	3 024.7	3 525.7
Non-controlling interest	47.2	52.1
Total equity	3 071.9	3 577.8
Long-term debt	1 531.6	1 503.7
Post-retirement benefit obligation	272.1	251.2
Deferred tax liabilities	65.3	66.9
Other	472.5	450.0
Non-current liabilities	2 341.5	2 271.8
Trade and other payables	2 372.8	1 990.7
Tax payable	111.7	53.5
Short-term debt	15.2	920.6
Other current liabilities	392.0	240.3
Current liabilities	2 891.7	3 205.1
Total equity and liabilities	8305.1	9 054.7

Statement of comprehensive income
	2007	2006
	(R million)	(R million)
Turnover	21 175.0	20 064.9
Cost of sales and services rendered	(14 501.1)	(13 798.3)
Gross profit	6 673.9	6 266.6
Other operating income	747.3	1 687.6
Operating expenses	(5 783.7)	(5 955.0)
Operating profit	1 637.5	1 999.2
Investment income	69.8	1.0
Finance cost	(281.2)	(502.5)
Other income	380.0	0.0
Profit before tax	1 806.1	1 497.7
Tax	(546.3)	(552.5)
Profit after tax	1 259.8	945.2
Minority interest	(12.1)	(8.5)
Preference share dividends	(17.3)	(11.1)
Attributable earnings	1 230.4	925.6
Ordinary dividends	(179.0)	(79.0)
Retained earnings (for the year)	1 051.4	846.6

Industry Benchmarks 2007
Net Profit Margin	6.20%
Return on Assets (ROA)	11.50%
Return on Ordinary Shareholders' Equity (ROSHE)	25.00%
Current ratio	2 times
Debt-to-Assets ratio	0.65 times
Inventory turnover time	36 days

NB: In respect of average assets, average inventories and average ordinary shareholders' equity for 2006, use the 2006 closing balances as the average values.

1. Calculate the debt-to-assets ratio for 2006 and 2007 and interpret your results.

2. Calculate the inventory turnover time ratio for 2006 and 2007 and interpret your results.