Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

hi please assist (20 Marks) QUESTION 3 Extracts of the financial statements of Rexel Limited for 2019 are given below. REQUIRED 3.1 Calculate the following

hi please assist
image text in transcribed
image text in transcribed
image text in transcribed
(20 Marks) QUESTION 3 Extracts of the financial statements of Rexel Limited for 2019 are given below. REQUIRED 3.1 Calculate the following ratios for 2019. Where applicable, round off answers to two decimal places. 3.1.1 Net profit margin (2 marks) 3.1.2 Acid test ratio (2 marks) 3.1.3 Debt-equity ratio (2 marks) 3.1.4 Inventory turnover (2 marks) 3.1.5 Average collection period (Use 360 days) (2 marks) 3.1.6 Return on equity (2 marks) 3.2 Refer to your answers in question 3.1 above and answer the following questions: 3.2.1 Comment on the ability of the company to pay its creditors when business conditions are unfavourable 3.2.2 Are the collections from debtors satisfactory? Explain 3.2.3 As a shareholder would you be satisfied with the return on your investment? Motivate your answer 3.2.4 Suggest TWO (2) ways in which the company can improve its net profit margin (2 marks) (2 marks) (2 marks) (2 marks) INFORMATION INFORMATION Rexel Limited Extract of Statement of Comprehensive Income for the year ended 31 December 2019 R Sales (all credit) Cost of sales Eamnings before interest and taxes (EBIT) Interest expense Profit before tax Eamings after interest and taxes 2 970 000 1 980 000 363 000 33 000 330 000 231 000 Extract of Statement of Financial Position as at 31 December 2019 R 2 029 500 693 000 Non-current assets Current assets Equity Non-current liabilities Current liabilities 1 980 000 495 000 247 500 Note: Inventories amounted to R264 000 on 31 December 2019 and R226 000 on 31 December 2018 Accounts receivable amounted to R300 000 on 31 December 2019 - Credit terms to debtors are 30 days

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Personal Finance

Authors: E Thomas Garman, Raymond Forgue

11th Edition

1111531013, 9781111531010

More Books

Students also viewed these Finance questions