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QUESTION TWO [20] Purca Limited operates in the manufacturing industry. The company constructs car parts and protective structures for motor vehicles in homes, large offices and factories. The company was established in 1915 by entrepreneur, Sandy Malou. It developed through aggressive marketing and has branches throughout RSA. After a brief listing on the development Capital Market, it obtained a listing on the main board of the JSE Securities Exchange in 2016. The summarised balance sheet and income statement for the financial year ended 30 September 2019 have been obtained for analysis. The dividend paid during the financial year amounted to R50 000. Purca Limited's Statement of Comprehensive Income for the year ended 30 September 2020 is detailed below: 2020 2019 Revenue R1 700 000 1 000 000 Less: Cost of sales 1 000 000 400 000 700 000 600 000 R70 000 50 000 120 000 60 000 40 000 10 000 100 000 50 000 Gross profit Less: Operating expenses Selling expense General and administrative expenses Lease expense Depreciation expense Less: Total operating expense Profit from operations (EBIT) Less: Finance cost Net profit before tax Less: Income tax expense Profit for the year R 330 000 170 000 370 000 430 000 70 000 120 000 R 300 000 R 310 000 90 000 93 000 R 210 000 R 217 000 Purca Limited's Statement of financial position as at 30 September 2020 2020 2019 ASSETS Non-current assets 1 200 000 1 050 000 Plant and equipment Property and machinery 850 000 800 000 Furniture and fixtures 300 000 220 000 Vehicles 100 000 80 000 Other noncurrent assets 50 000 50 000 2 500 000 2 200 000 Total gross noncurrent assets (at cost) Less: Accumulated depreciation 1 300 000 1 200 000 1 200 000 1 000 000 Current assets Inventory 600 000 900 000 Trade receivables 400 000 500 000 Cash 1 000 000 500 000 2 000 000 1 900 000 TOTAL ASSETS 3 200 000 2 900 000 EQUITY & LIABILITIES Equity Share capital Retained earnings 600 000 600 000 600 000 500 000 Total equity 1 200 000 1 100 000 Noncurrent liabilities 600 000 400 000 Long-term borrowings Current liabilities 700 000 500 000 Trade payables Short-term borrowing 600 000 700 000 Accruals 100 000 200 000 1 400 000 1 400 000 Total equity and liabilities 3 200 000 2 900 000 Required: Calculate the following ratios for 2020: Current ratio 2.2 Quick ratio/acid ratio 2.1 2.3 Debtors turnover (4) (4) (4) (4) (4) 2.4 Debtors collection 2.5 Stock turnover