Question
Peaks Ltd reported the following information in its financial statements: 2021 2020 $ $ Sales Revenue 700,200 650,000 Cost of Sales 422,000 474,500 Net Profit
Peaks Ltd reported the following information in its financial statements:
| 2021 | 2020 |
| $ | $ |
Sales Revenue | 700,200 | 650,000 |
Cost of Sales | 422,000 | 474,500 |
Net Profit | 82,000 | 58,000 |
Total Current Assets | 161,300 | 144,400 |
Total Non-current Assets | 440,700 | 370,800 |
Total Current Liabilities | 75,400 | 80,100 |
5 year 10% Debentures | 110,600 | 125,900 |
Share Capital | 340,000 | 300,000 |
General Reserve | 10,000 | 10,000 |
Retained Earnings | 175,000 | 95,000 |
The company does not have any inventory on hand in 2020 but has total prepaid expenses amounting to $51,400.
Required:
Using the above information calculate the following financial ratios to two decimal places. Provide a formula and show your workings for each ratio.
a) Gross profit margin for 2020 (1 mark)
b) Debt to assets for 2021 (1 mark)
c) Quick Ratio for 2020 (1 mark)
d) Return on Ordinary Shareholders Equity for 2021 (1 mark)
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