FOUR [25]

The following information has been extracted from the records of KS Projects Ltd:

Statement of Comprehensive Income for the year ended 31 December 2021:

R

Revenue (60 % on credit)	18 000
Cost of revenue (50 % on credit)	9 000
Depreciation	1 400
Profit before Interest and Tax	7 600
Interest paid	1 200
Taxable profit	6 400
Taxes (30 %)	2 089
Net profit after tax	4 311
Dividends	1 352
Addition to retained profit	2 959

Statement of Financial Position as at 31 December 2021:

2020 2021

R R

Non-current assets

Plant and equipment	16 968	16 200
Current assets Stock	5 740	8 450
Debtors	2 230	3 232
Cash	808	494
	8 778	12 176
Total assets	25 746	28 376
Owners equity	3 600	3 600
Share capital	12 859	15 818
Non-current liabilities	16 459	19 418
Long term loan	6 800	6 300
Short term loan	750	800
Current liabilities	7 550	7 100
Creditors	1 737	1 858
Total equity and liabilities	25 746	28 376

Required:

1. Calculate and comment on each of the following liquidity ratios for 2020 and 2021:
   1. Current ratio (4)
   2. Acid test ratio (4)
   2. Calculate each of the following activity ratios:
      1. Stock turnover rate (4)
      2. Debtor collection period (4)
      3. Creditor payment period (3)
   3. Calculate the solvency ratio for 2020 and 2021
   4. Calculate each of the following profitability ratios:
      1. Profitability of the business (3)
      2. Profitability of own capital (3)