Question 1

You are given the following information:

JD Bvumavaranda consolidated profit and loss account for year ended 31 July 2023 2023 2022 $000 $000 Turnover from continuing operations 730,913 601,295 Cost of sales (621,894) (503,699) Gross profit 109,019 97,596 Administrative expenses (34,036) (27,511) Operating profit 74,983 70,085 Net interest payable (18,844) (16,517) Profit on ordinary activities before tax 56,139 53,568 Tax on profit on ordinary activities (19,744) (18,152) Profit on ordinary activities after tax 36,395 35,416 Dividends (7,434) (6,902) Retained profit for the year 28,961 28,514 JD Bvumavaranda Group balance sheet at 31 July 2023

2003 2002 $000 $000 Fixed assets Tangible assets 773,823 745,041 773,823 745,041 Current assets Stocks 9,601 8,594 Debtors due after more than one year 8,448 7,682 Debtors due after less than one year 9,017 8,237 Investments 3,301 1,203 Cash 15,160 13,609 42,527 38,325 Creditors due within one year (135,361) (122,919) Net current liabilities (92,834) (84,594) Total assets less current liabilities 680,989 660,447 Creditors due after one year (299,942) (292,915) Provisions for liabilities and charges (62,419) (57,399) 318,628 310,133 Capital and reserves. Called-up share capital 4,149 4,292 Share premium account 126,739 124,819 Capital redemption reserve, 165 Revaluation reserve 22,439 23,386 Profit and loss account 165,136 157,636 Equity shareholders funds 318,628 310,133

Required: Calculate the following Ratios and briefly comment on their implications.

Operating return on equity Financial leverage multiplier Return on capital employed. Asset turnover Net profit margin Current ratio