QUESTION $2$

$20$ MARKS

Joomas Furniture company has requested that you determine whether the company's ability to pay its current liabilities and long$-$term debts improved or deteriorated during $2024.$ They provided you with the following information for Joomas for $2024$ and $2023.$

$\backslash$table$[[,2024,2023],[$Cash$,$R$27000,$R$47000],[$Shor$-$lerm investments,R$33000,$R$4000],[$Net receivables,R$120000,$R$135000],[$Inventory$,$R$238000,$R$271000],[$Prepaid expenses,R$22000,$R$8000],[$Total assets,R$590000,$R$510000],[$Total current liabilities,R$187000,$R$332000],[$Longterm debt,R$41000000,],[$Income from operations,R$41000000,],[$Interest expense,,R$43000]]$

PBAABO$7$

MAYJUNE $2024$ EXAMNATION

Requirements:

Determine whether Joomas ability to pay current liabilities and long$-$term debt improved or deteriorated from $2023$ to $2024.$ To answer this question calculate the following ratios for $2024$ and $2023.($Round your answers to two decimal places$)$

a$.$ Current ratio

b$.$ Acid$-$test ratio

c$.$ Debt ratio

d$.$ Times$-$interest$-$earned ratio

Summarise the results of your analysis in a written report.